Question

Fraud losses generally reduce a firm's income on a dollar-for-dollar basis.
a.True
b.False

Answer 1

Fraud losses generally reduce a firm's income on a dollar-for-dollar basis.

Step-by-step explanation:

The statement “Fraud losses generally reduce a firm's income on a dollar-for-dollar basis” is true.

Fraud losses refer to financial losses incurred by a firm due to fraudulent activities such as embezzlement, theft, or accounting misstatements. When fraudulent activities occur, the firm's income is reduced by the same amount as the losses.

For example, if a firm experiences $1,000 in fraud losses, its income will decrease by $1,000. This reduction in income directly impacts the firm's profitability and financial position.