Detecting Accounting Fraud 1st Edition by Cecil Jackson

Exercise 5

Which of the following is not a signal of possible understatement of cost of goods sold? (a) A significant increase in inventory as a percentage of cost of goods sold.
(b) A sudden increase in the gross margin percentage.
(c) An increase in accounts payable as a percentage of sales.
(d) A significant decrease in the reserve for obsolescence of inventory.