Chapter

Chapter
09
Multiple Choice
1. When is searching through someone's garbage considered a legal activity?
a. When the trash is left unattended inside the suspect's home
b. When the trash is in the possession of the suspect
c. When the trash has left the suspect's home or sidewalk
d. Searching through a person's trash is never considered as a legal activity
ANSWER: c
RATIONALE: a. Incorrect. Once the trash leaves the suspect's home, sidewalk, or fenced area,
investigators can usually freely and legally search the trash.
b. Incorrect. Once the trash leaves the suspect's home, sidewalk, or fenced area,
c. Correct. Once the trash leaves the suspect's home, sidewalk, or fenced area,
d. Incorrect. Once the trash leaves the suspect's home, sidewalk, or fenced area,
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.9.2
DATE CREATED: 3/16/2018 8:52 PM
DATE MODIFIED: 3/20/2018 8:27 AM
2. Income from known sources subtracted from total income gives a reasonable estimate of:
a. funds from unknown sources.
b. liabilities.
c. living expenses.
d. net worth.
ANSWER: a
RATIONALE: a. Correct. Income − Funds from Known Sources = Funds from Unknown Sources.
b. Incorrect. Income − Funds from Known Sources = Funds from Unknown Sources.
c. Incorrect. Income − Funds from Known Sources = Funds from Unknown Sources.
d. Incorrect. Income − Funds from Known Sources = Funds from Unknown Sources.
POINTS: 1
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Chapter 09
3. Which of the following is NOT one of the major credit-reporting agencies?
a. Experian
b. Equifax
c. TransUnion
d. ProQuest
ANSWER: d
RATIONALE: a. Incorrect. Experian is a major credit-reporting agency.
b. Incorrect. Equifax is a major credit-reporting agency.
c. Incorrect. TransUnion is a major credit-reporting agency.
d. Correct. The three major credit-reporting agencies are Experian, Equifax, and
TransUnion.
POINTS: 1
4. From the following, identify an item that does NOT go into current net worth calculations?
a. Preliminary expenses
b. Prior year's net worth
c. Funds from known sources
d. Assets
ANSWER: a
RATIONALE: a. Correct. Preliminary expenses are not part of the net worth calculations.
b. Incorrect. This is used in net worth calculations.
c. Incorrect. This is used in net worth calculations.
d. Incorrect. This is used in net worth calculations.
POINTS: 1

Chapter 09
5. Which of the following is NOT information maintained by credit-reporting agencies?
a. Supplier or creditor information, such as sales volume and credit policies
b. Account information, such as payment schedules, items purchased, and buying habits
c. Marketing information, such as customer breakdowns by age, sex, and income levels
d. Consumer information, such as addresses, ages, family members, and incomes
ANSWER: a
RATIONALE: a. Correct. Credit-reporting companies typically maintain consumer, account, and
marketing information, as well as information on current and former employees.
b. Incorrect. This information is maintained by credit-reporting agencies.
c. Incorrect. This information is maintained by credit-reporting agencies.
d. Incorrect. This information is maintained by credit-reporting agencies.
POINTS: 1
6. Which of the following does NOT constitute a federal source of information?
a. County clerk
b. Central Intelligence Agency
c. Secret Service
d. Department of Justice
ANSWER: a
RATIONALE: a. Correct. This is a local agency.
b. Incorrect. This is a federal agency.
c. Incorrect. This is a federal agency
d. Incorrect. This is a federal agency.
POINTS: 1

Chapter 09
7. Net Worth Increase + Living Expenses =
a. Income
b. Funds from Known Sources
c. Liabilities
d. Assets
ANSWER: a
RATIONALE: a. Correct. Net Worth Increase + Living Expenses = Income
b. Incorrect. Net Worth Increase + Living Expenses = Income
c. Incorrect. Net Worth Increase + Living Expenses = Income
d. Incorrect. Net Worth Increase + Living Expenses = Income
POINTS: 1
8. Mandy calls a local newspaper and pretends to be a neighbor who is away for the winter. She obtains account history
and orders the newspaper for six months. Has Mandy committed a fraud? If yes, under which act?
a. No, the newspaper has not yet been delivered or paid.
b. Yes, she is in violation of the Gramm-Leach-Bliley Act of 1999.
c. No, as the neighbor has not served any written notice to keep the information private.
d. Yes, she is in violation of Fair and Accurate Credit Transactions Act of 2003.
ANSWER: b
RATIONALE: a. Incorrect. Mandy is in violation of the Gramm-Leach-Bliley Act of 1999 because she
used false pretenses to access personal information of her neighbor.
b. Correct. Mandy is in violation of the Gramm-Leach-Bliley Act of 1999 because she
c. Incorrect. Mandy is in violation of the Gramm-Leach-Bliley Act of 1999 because she
d. Incorrect. Mandy is in violation of the Gramm-Leach-Bliley Act of 1999 because she
POINTS: 1

Chapter 09
9. To find marital and voting records, one would need to look at the records maintained by the:
a. county sheriff and other officers.
b. Social Security Administration.
c. county clerk.
d. local courts.
ANSWER: c
RATIONALE: a. Incorrect. County clerks maintain numerous records on local citizens, including voter
registration records and marriage licenses.
b. Incorrect. County clerks maintain numerous records on local citizens, including voter
c. Correct. County clerks maintain numerous records on local citizens, including voter
d. Incorrect. County clerks maintain numerous records on local citizens, including voter
POINTS: 1
10. Funds from unknown sources equal:
a. assets less liabilities.
b. net worth increase plus living expenses.
c. income less funds from known sources.
d. net worth less prior year's net worth.
ANSWER: c
RATIONALE: a. Incorrect. Income − Funds from Known Sources = Funds from Unknown Sources.
b. Incorrect. Income − Funds from Known Sources = Funds from Unknown Sources.
c. Correct. Income − Funds from Known Sources = Funds from Unknown Sources.
d. Incorrect. Income − Funds from Known Sources = Funds from Unknown Sources.
POINTS: 1

Chapter 09
11. Which of the following information is NOT contained in the Social Security numbers issued by the Social Security
Administration?
a. Area of person's residence at time of issuance
b. Person's serial number
c. Age
d. Group
ANSWER: c
RATIONALE: a. Incorrect. Every SSN contains information about the area (first three digits), the
group (middle two digits), and the person's serial number (last four digits).
b. Incorrect. Every SSN contains information about the area (first three digits), the
c. Correct. Every SSN contains information about the area (first three digits), the group
(middle two digits), and the person's serial number (last four digits).
d. Incorrect. Every SSN contains information about the area (first three digits), the
POINTS: 1
12. The Gramm-Leach-Bliley Act prohibits:
a. telemarketers from selling information to corporations.
b. the use of false pretenses to access the personal information of others.
c. the public from accessing the criminal database of the FBI.
d. customers to opt out of information sharing.
ANSWER: b
RATIONALE: a. Incorrect. The Gramm-Leach-Bliley Act protects against the use of false pretenses.
b. Correct. The Gramm-Leach-Bliley Act protects against the use of false pretenses.
c. Incorrect. The Gramm-Leach-Bliley Act protects against the use of false pretenses.
d. Incorrect. The Gramm-Leach-Bliley Act protects against the use of false pretenses.
POINTS: 1

Chapter 09
13. Identify the usual order of net worth calculations used to determine stolen funds.
a. Find net worth, find the net worth increase, find income, find the funds from unknown sources
b. Find net worth, find income, find the funds from known sources, find the net worth increase
c. Find income, find net worth, find the net worth increase, find the funds from unknown sources
d. Find net worth, find the net worth increase, find the funds from known sources, find income
ANSWER: a
RATIONALE: a. Correct. The result of each calculation is used in the next calculation, beginning with
net worth and ending with the determination of funds from unknown sources.
b. Incorrect. The result of each calculation is used in the next calculation, beginning with
c. Incorrect. The result of each calculation is used in the next calculation, beginning with
d. Incorrect. The result of each calculation is used in the next calculation, beginning with
POINTS: 1
14. Which of the following will be useful in ascertaining whether a doctor is legitimate?
a. Department of Business Regulation
b. Secretary of State
c. State Medical Registry
d. County Clerk
ANSWER: a
RATIONALE: a. Correct. A quick check with the Department of Business Regulation in the relevant
state will disclose whether the doctor is legitimate.
b. Incorrect. A quick check with the Department of Business Regulation in the relevant
c. Incorrect. A quick check with the Department of Business Regulation in the relevant
d. Incorrect. A quick check with the Department of Business Regulation in the relevant
POINTS: 1

Chapter 09
15. Which federal agency maintains information on individuals who may be a threat to national security?
a. Department of Justice
b. Bureau of Prisons
c. Department of Defense
d. Secret Service
ANSWER: c
RATIONALE: a. Incorrect. The Department of Defense maintains information on individuals who may
be a threat to national security.
b. Incorrect. The Department of Defense maintains information on individuals who may
c. Correct. The Department of Defense maintains information on individuals who may
d. Incorrect. The Department of Defense maintains information on individuals who may
POINTS: 1
16. Identify the principal investigative agency of the Department of Justice.
a. CIA
b. NCIC
c. FBI
d. Secret Service
ANSWER: c
RATIONALE: a. Incorrect. The FBI is the principal investigative agency of the Department of Justice.
b. Incorrect. The FBI is the principal investigative agency of the Department of Justice.
c. Correct. The FBI is the principal investigative agency of the Department of Justice.
d. Incorrect. The FBI is the principal investigative agency of the Department of Justice.
POINTS: 1

Chapter 09
17. Which of the following agencies is responsible for protecting the president of the United States and other federal
dignitaries?
a. CIA
b. NCIC
c. FBI
d. Secret Service
ANSWER: d
RATIONALE: a. Incorrect. The Secret Service, part of the Department of Homeland Security, is
responsible for protecting the president of the United States and other federal
dignitaries.
b. Incorrect. The Secret Service, part of the Department of Homeland Security, is
dignitaries.
c. Incorrect. The Secret Service, part of the Department of Homeland Security, is
dignitaries.
d. Correct. The Secret Service, part of the Department of Homeland Security, is
dignitaries.
POINTS: 1

Chapter 09
18. What is the main objective of the net worth method?
a. To determine the income and expenditures of an individual
b. To determine the extent of stolen funds
c. To determine the financial position of the organization
d. To determine the change in net worth
ANSWER: b
RATIONALE: a. Incorrect. The main objective of net worth calculations is to determine the extent of
stolen funds.
b. Correct. The main objective of net worth calculations is to determine the extent of
stolen funds.
c. Incorrect. The main objective of net worth calculations is to determine the extent of
stolen funds.
d. Incorrect. The main objective of net worth calculations is to determine the extent of
stolen funds.
POINTS: 1

Chapter 09
19. Using the net worth method, calculate an individual's funds from unknown sources. The following information is
available:
Income $100,000
Funds from known sources 80,000
Salary 60,000
a. $0
b. $10,000
c. $20,000
d. $40,000
ANSWER: c
RATIONALE: a. Incorrect. Income − Funds from Known Sources = Funds from Unknown Sources =
$100,000 − $80,000 = $20,000. Salary is not factored into the equation since it is a part
of the funds from known sources.
b. Incorrect. Income − Funds from Known Sources = Funds from Unknown Sources =
c. Correct. Income − Funds from Known Sources = Funds from Unknown Sources =
d. Incorrect. Income − Funds from Known Sources = Funds from Unknown Sources =
POINTS: 1

Chapter 09
20. Which of the following is classified as a state source of information?
a. Bureau of Alcohol, Tobacco, and Firearms
b. County clerk's office
c. Department of Motor Vehicles
d. Permit departments
ANSWER: c
RATIONALE: a. Incorrect. This is a federal source of information.
b. Incorrect. This is a local source of information.
c. Correct. A DMV is a state-level government agency.
d. Incorrect. This is a local source of information.
POINTS: 1
21. Which of the following makes the net worth method ineffective in some situations?
a. It gives a conservative estimate of stolen funds that is not readily accepted as evidence by courts.
b. It rarely facilitates obtaining confessions from suspects.
c. When people have income, they either purchase additional assets, pay off liabilities, or improve their lifestyle,
thus increasing living expenses.
d. Embezzlers typically spend their money on food, jewelry, vacations, and other luxuries that are difficult to track.
ANSWER: d
RATIONALE: a. Incorrect. Unfortunately, embezzlers typically spend increasing amounts on food,
jewelry, vacations, and other luxuries that are difficult to track and cannot be factored
into net worth calculations.
b. Incorrect. Unfortunately, embezzlers typically spend increasing amounts on food,
c. Incorrect. Unfortunately, embezzlers typically spend increasing amounts on food,
d. Correct. Unfortunately, embezzlers typically spend increasing amounts on food,
POINTS: 1

Chapter 09
22. Using the data given below, calculate the funds from unknown sources for Year 2.
Year 1 Year 2 Year 3
Total assets $252,000 $266,000 $309,000
Total liabilities 244,000 134,000 64,000
Funds from known sources 30,000 69,000 74,000
Total living expenses 17,500 10,800 8,800
a. $(3,200)
b. $65,800
c. $76,600
d. $69,000
ANSWER: b
RATIONALE: a. Incorrect. Assets − Liabilities = Net Worth; Net Worth − Prior Year's Net Worth =
Net Worth Increase; Net Worth Increase + Living Expenses = Income; Income − Funds
from Known Sources = Funds from Unknown Sources. Year 2: $266,000 − $134,000 =
$132,000; $132,000 − $8,000 = $124,000; $124,000 + $10,800 = $134,800; $134,800 −
$69,000 = $65,800.
b. Correct. Assets − Liabilities = Net Worth; Net Worth − Prior Year's Net Worth = Net
Worth Increase; Net Worth Increase + Living Expenses = Income; Income − Funds
$132,000; $132,000 − $8,000 = $124,000; $124,000 + $10,800 = $134,800; $134,800 −
$69,000 = $65,800.
c. Incorrect. Assets − Liabilities = Net Worth; Net Worth − Prior Year's Net Worth =
$132,000; $132,000 − $8,000 = $124,000; $124,000 + $10,800 = $134,800; $134,800 −
$69,000 = $65,800.
d. Incorrect. Assets − Liabilities = Net Worth; Net Worth − Prior Year's Net Worth =
$132,000; $132,000 − $8,000 = $124,000; $124,000 + $10,800 = $134,800; $134,800 −
$69,000 = $65,800.
POINTS: 1

Chapter 09
23. Which of the following is a primary reason for conducting conversion searches?
a. To find out the suspect's feelings about the organization
b. To understand the suspect's reaction to crisis
c. To check the extent of the suspect's debt
d. To gather evidence that can be used in interrogations to obtain a confession
ANSWER: d
RATIONALE: a. Incorrect. Conversion searches are performed for two reasons: (1) to determine the
extent of embezzlement and (2) to gather evidence that can be used in interrogations to
obtain a confession.
b. Incorrect. Conversion searches are performed for two reasons: (1) to determine the
c. Incorrect. Conversion searches are performed for two reasons: (1) to determine the
d. Correct. Conversion searches are performed for two reasons: (1) to determine the
POINTS: 1

Chapter 09
24. Name the agency of the Department of Justice charged with enforcing laws against narcotics trafficking.
a. NCIC
b. Secret Service
c. DEA
d. SSA
ANSWER: c
RATIONALE: a. Incorrect. The Drug Enforcement Administration (DEA) is the agency of the
Department of Justice charged with enforcing controlled substances laws and
regulations, including drug trafficking.
b. Incorrect. The Drug Enforcement Administration (DEA) is the agency of the
c. Correct. The Drug Enforcement Administration (DEA) is the agency of the
d. Incorrect. The Drug Enforcement Administration (DEA) is the agency of the
POINTS: 1
25. The Department of Vital Statistics maintains:
a. licensing information.
b. military records.
c. fraud-related information.
d. birth records.
ANSWER: d
RATIONALE: a. Incorrect. The Department of Vital Statistics maintains birth records.
b. Incorrect. The Department of Vital Statistics maintains birth records.
c. Incorrect. The Department of Vital Statistics maintains birth records.
d. Correct. The Department of Vital Statistics maintains birth records.
POINTS: 1

Chapter 09
26. Using the data below, calculate living expenses.
Assets $100,000
Liabilities 37,500
Prior year's net worth 32,500
Income 55,000
a. $57,500
b. $17,500
c. $20,000
d. $25,000
ANSWER: d
RATIONALE: a. Incorrect. Income − Net Worth Increase = Living Expenses; $55,000 − [($100,000 −
$37,500) − $32,500] = $55,000 − $30,000 = $25,000.
b. Incorrect. Income - Net Worth Increase = Living Expenses; $55,000 − [($100,000 −
$37,500) − $32,500] = $55,000 − $30,000 = $25,000.
c. Incorrect. Income - Net Worth Increase = Living Expenses; $55,000 − [($100,000 −
$37,500) − $32,500] = $55,000 − $30,000 = $25,000.
d. Correct. Income - Net Worth Increase = Living Expenses; $55,000 − [($100,000 −
$37,500) − $32,500] = $55,000 − $30,000 = $25,000.
POINTS: 1

Chapter 09
27. What is meant by the term "opting out"?
a. Serving a written notice, denying the bank the right to sell your personal information
b. Withdrawing from a fraud being perpetrated by a colleague
c. A bidder denying to pay the proceeds of the bid on becoming bankrupt
d. Whistle-blowing by a person who was part of a fraud
ANSWER: a
RATIONALE: a. Correct. "Opting out" is providing written notice to the bank denying the bank the right
to sell your personal information.
b. Incorrect. "Opting out" is providing written notice to the bank denying the bank the
right to sell your personal information.
c. Incorrect. "Opting out" is providing written notice to the bank denying the bank the
d. Incorrect. "Opting out" is providing written notice to the bank denying the bank the
POINTS: 1
28. What is meant by the term "trashing" in relation to fraud investigation?
a. A broad search on the Internet to obtain valuable information
b. Looking through a suspect's garbage for possible evidence
c. Destroying hard copies of important documents, so as to leave no evidence
d. Gaining financial information through previous acquaintances
ANSWER: b
RATIONALE: a. Incorrect. Trashing a suspect involves looking through a person's trash for possible
evidence.
b. Correct. Trashing a suspect involves going through a person's trash for possible
evidence.
c. Incorrect. Trashing a suspect involves looking through a person's trash for possible
evidence.
d. Incorrect. Trashing a suspect involves looking through a person's trash for possible
evidence.
POINTS: 1

Chapter 09
29. Name the major database maintained by the FBI.
a. CIA
b. UCC filings
c. DEA
d. NCIC
ANSWER: d
RATIONALE: a. Incorrect. This is one of the federal agencies.
b. Incorrect. This is maintained by the Secretary of State.
c. Incorrect. This is one of the agencies of the Department of Justice.
d. Correct. The major database maintained by the FBI is the National Crime Information
Center (NCIC).
POINTS: 1
30. Name the government agency whose information is valuable in tracing assets, establishing conflicts of interest,
identifying dummy companies, and determining changes in financial status.
a. Department of business regulation
b. Permit department
c. Secretary of State
d. County clerk
ANSWER: c
RATIONALE: a. Incorrect. Information available from the Secretary of State allows for the tracing of
assets, establishing conflicts of interest, identifying dummy companies, and determining
changes in financial status.
b. Incorrect. Information available from the Secretary of State allows for the tracing of
c. Correct. Information available from the Secretary of State allows for the tracing of
d. Incorrect. Information available from the Secretary of State allows for the tracing of
POINTS: 1

Chapter 09
31. Identify the state agency that maintains licensing information about various professionals.
a. Department of vital statistics
b. Department of business regulation
c. Permit department
d. County clerk
ANSWER: b
RATIONALE: a. Incorrect. Most states have a department of business regulation or a similar agency
that maintains licensing information about various professionals.
b. Correct. Most states have a department of business regulation or a similar agency
c. Incorrect. Most states have a department of business regulation or a similar agency
d. Incorrect. Most states have a department of business regulation or a similar agency
POINTS: 1
32. How are permit departments helpful in conversion investigation efforts?
a. By identifying the nature and location of businesses, new leases, and recent construction
b. By providing information about chattel mortgages and loans to individuals or businesses on equipment
c. By providing license numbers used for identification in transactions
d. By identifying owned assets, indebtedness, mortgage holders, trustees, or straw buyers
ANSWER: a
RATIONALE: a. Correct. Permit-issuing departments can be helpful in identifying the nature and
location of businesses, new leases, and recent construction.
b. Incorrect. Permit-issuing departments can be helpful in identifying the nature and
c. Incorrect. Permit-issuing departments can be helpful in identifying the nature and
d. Incorrect. Permit-issuing departments can be helpful in identifying the nature and
POINTS: 1

Chapter 09
33. Military records are not confidential and provide valuable information that can help you trace a person's whereabouts
through changing addresses. Which government agency furnishes such information?
a. Central Intelligence Agency
b. Federal Bureau of Investigation
c. Department of Defense
d. Department of Justice
ANSWER: c
RATIONALE: a. Incorrect. The Department of Defense maintains records on all military personnel,
both active and inactive.
b. Incorrect. The Department of Defense maintains records on all military personnel,
c. Correct. The Department of Defense maintains records on all military personnel, both
active and inactive.
d. Incorrect. The Department of Defense maintains records on all military personnel,
POINTS: 1

Chapter 09
Data Set 9-1

Home $220,000 $220,000 $220,000
Car 25,000 25,000 50,000
Investments 40,000 50,000 65,000
Bank account 3,000 7,000 10,000
Total assets $288,000 $302,000 $345,000
Home loan $200,000 $150,000 $100,000

Auto loan 20,000 0 0
Student loan 60,000 20,000 0
Total liabilities $280,000 $170,000 $100,000
Salary $95,000 $105,000

Investments 4,000 5,000
Inheritance 6,000 0
Total income $105,000 $110,000
Home loan $13,200 $13,200

Auto loan 9,600 9,600
Other living 20,000 22,000
Wedding 4,000 0
Total expenses $46,800 $44,800
34. Refer to Data Set 9-1. Calculate the net worth of the individual at the end of Year 1.
a. $3,000
b. $8,000
c. $0
d. $288,000
ANSWER: b
RATIONALE: a. Incorrect. Net worth at the end of Year 1 = $288,000 − $280,000 = $8,000.
b. Correct. Net worth at the end of Year 1 = $288,000 − $280,000 = $8,000.
c. Incorrect. Net worth at the end of Year 1 = $288,000 − $280,000 = $8,000.
d. Incorrect. Net worth at the end of Year 1 = $288,000 − $280,000 = $8,000.
POINTS: 1
PREFACE NAME: Data Set 9-1

Chapter 09
35. Refer to Data Set 9-1. The funds from unknown sources for Year 2 are:
a. $255,200.
b. $171,200.
c. $73,800.
d. $65,800.
ANSWER: d
$132,000; $132,000 − $8,000 = $124,000; $124,000 + $46,800 = $170,800; $170,800 −
$105,000 = $65,800.
b. Incorrect. Assets − Liabilities = Net Worth; Net Worth − Prior Year's Net Worth =
$132,000; $132,000 − $8,000 = $124,000; $124,000 + $46,800 = $170,800; $170,800 −
$105,000 = $65,800.
$132,000; $132,000 − $8,000 = $124,000; $124,000 + $46,800 = $170,800; $170,800 −
$105,000 = $65,800.
d. Correct. Assets − Liabilities = Net Worth; Net Worth − Prior Year's Net Worth = Net
$132,000; $132,000 − $8,000 = $124,000; $124,000 + $46,800 = $170,800; $170,800 −
$105,000 = $65,800.
POINTS: 1

Chapter 09
36. Refer to Data Set 9-1. The funds from unknown sources for Year 3 are:
a. $300,200.
b. $309,200.
c. $170,800.
d. $47,800.
ANSWER: d
$245,000; $245,000 − $132,000 = $113,000; $113,000 + $44,800 = $157,800; $157,800 −
$110,000 = $47,800.
b. Incorrect. Assets − Liabilities = Net Worth; Net Worth − Prior Year's Net Worth =
$245,000; $245,000 − $132,000 = $113,000; $113,000 + $44,800 = $157,800; $157,800 −
$110,000 = $47,800.
$245,000; $245,000 − $132,000 = $113,000; $113,000 + $44,800 = $157,800; $157,800 −
$110,000 = $47,800.
d. Correct. Assets − Liabilities = Net Worth; Net Worth − Prior Year's Net Worth = Net
$245,000; $245,000 − $132,000 = $113,000; $113,000 + $44,800 = $157,800; $157,800 −
$110,000 = $47,800.
POINTS: 1

Chapter 09
37. Which Act governs the information maintained by credit-reporting agencies?
a. The Sarbanes-Oxley Act of 2002
b. The Gramm-Leach-Bliley Act of 1999
c. The Fair and Accurate Credit Transactions Act of 2003
d. The Fair Credit Reporting Act of 1971
ANSWER: d
RATIONALE: a. Incorrect. Information maintained by credit-reporting agencies is governed by the Fair
Credit Reporting Act (FCRA) of 1971.
b. Incorrect. Information maintained by credit-reporting agencies is governed by the Fair
c. Incorrect. Information maintained by credit-reporting agencies is governed by the Fair
d. Correct. Information maintained by credit-reporting agencies is governed by the Fair
POINTS: 1
38. Which of the following is NOT a form of database access?
a. Subscription-based fees apply before access is granted
b. There is a per-use fee charged
c. A set number of searches are free followed by a daily charge for use thereafter
d. Unlimited free access to search is granted
ANSWER: c
RATIONALE: a. Incorrect. Databases may be subscription-based, have a per-use fee, or allow
unlimited free searching.
b. Incorrect. Databases may be subscription-based, have a per-use fee, or allow
c. Correct. Databases may be subscription-based, have a per-use fee, or allow unlimited
free searching.
d. Incorrect. Databases may be subscription-based, have a per-use fee, or allow
POINTS: 1

Chapter 09
39. Which of the following is NOT a publicly available means of fine tuning a Google search?
a. By entering specific phrases
b. By placing a minus sign before unique terms
c. By utilizing domain restrictions
d. By utilizing internal database restrictions
ANSWER: b
RATIONALE: a. Incorrect. Using specific phrases narrows the search.
b. Incorrect. The minus sign filters out unwanted results.
c. Incorrect. Domain restrictions narrow the search.
d. Correct. Google does not search private databases.
POINTS: 1
40. Which of the following is a limitation to the net worth method?
a. Computations only include assets and liabilities that can be discovered.
b. The resulting amounts are not acceptable as evidence in court.
c. The net worth method only gives an estimate of net worth increases or decreases.
d. When presented with the net worth amount(s), suspects sometimes confess.
ANSWER: a
RATIONALE: a. Correct. Because only assets and reductions in liabilities that can be discovered enter
into the calculation, net worth calculations tend to give a conservative estimate of stolen
funds.
b. Incorrect. Because the calculations are conservative, the amounts determined to be
stolen are usually readily accepted as evidence by courts.
c. Incorrect. They are estimates, but they indicate unexplained income.
d. Incorrect. To be able to use the information to solicit a confession is an advantage
rather than a limitation.
POINTS: 1

Chapter 09
41. Which of the following statements regarding the U.S. Postal Service is NOT accurate?
a. Because the use of mail is so common in frauds, the federal mail statutes are the workhorse statutes in federal
crimes.
b. The U.S. Postal Service is a quasi-governmental organization.
c. Postal inspectors share jurisdiction with other federal, state, and local agencies.
d. Postal inspectors are some of the best and most helpful state investigators.
ANSWER: a
RATIONALE: a. Incorrect. Postal inspectors are federal investigators.
b. Incorrect. Postal inspectors are federal investigators.
c. Incorrect. Postal inspectors are federal investigators.
d. Correct. Postal inspectors are federal investigators.
POINTS: 1
42. Which of the following is NOT public information on record with the Secretary of State through the Uniform
Commercial Code?
a. A company's articles of incorporation
b. A company's current board of directors
c. A company's registered agent
d. A company's bylaws
ANSWER: b
RATIONALE: a. Incorrect. This is information on record.
b. Correct. Only the initial board of directors is on record.
c. Incorrect. This is information on record.
d. Incorrect. This is information on record.
POINTS: 1

Chapter 09
43. Using the data given below, calculate the funds from unknown sources for Year 3.
Total assets $252,000 $266,000 $309,000
Total liabilities 244,000 134,000 64,000
Funds from known sources 30,000 69,000 74,000
Total living expenses 17,500 10,800 8,800
a. $(26,200)
b. $47,800
c. $56,600
d. $74,000
ANSWER: b
$245,000; $245,000 − $132,000 = $113,000; $113,000 + $8,800 = $121,800; $121,800 −
$74,000 = $47,800.
b. Correct. Assets − Liabilities = Net Worth; Net Worth − Prior Year's Net Worth = Net
$245,000; $245,000 − $132,000 = $113,000; $113,000 + $8,800 = $121,800; $121,800 −
$74,000 = $47,800.
$245,000; $245,000 − $132,000 = $113,000; $113,000 + $8,800 = $121,800; $121,800 −
$74,000 = $47,800.
d. Incorrect. Assets − Liabilities = Net Worth; Net Worth − Prior Year's Net Worth =
$245,000; $245,000 − $132,000 = $113,000; $113,000 + $8,800 = $121,800; $121,800 −
$74,000 = $47,800.
POINTS: 1

Chapter - 09 Financial Accounting and Accounting Standard

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Year 1 Year 2 Year 3

Home loan $200,000 $150,000 $100,000

Salary $95,000 $105,000

Home loan $13,200 $13,200

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