is it a magic trick?

Question

if ken lay has 10 million and his company stakeholders has lost 4 billion dollars, where did the rest of the money go? there should be checks issued to someone? right? the vanishing act has never been explained. i assumed that all the money went in to his offshore bank accounts. when people invested into the company, who was the AP manger paying? (real answers of accounting only)

Answer 1

Favorite Answer

Its money they said they had. The inflated their value. Its not cash they ever really had.

Answer 2

The company could be worth 10 million...that doesn't mean they have 10 million dollars.

Answer 3

Accruals.