Which of the Following Accounting Policies Is Consistent with "Creative

question 31

Multiple Choice

Which of the following accounting policies is consistent with "creative accounting"?

• A) A firm with management compensation contract changes its depreciation policy from straight-line to accelerated rate method;
• B) A start-up firm adopts a policy to expense research and development expenses as incurred;
• C) A profit making tobacco producing firm changes its depreciation policy from straight-line to accelerated rate method;
• D) A firm with debt contracts shifts inventory accounting policy from FIFO to LIFO method;
• E) None of the given Answers.

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Definitions:

Numerical Data

Information that can be measured or counted and represented in numbers and values.

Multicollinearity

A statistical phenomenon in which two or more independent variables in a regression model are highly correlated, potentially distorting the results.

Independent Variables

Factors or predictors in an experiment or model that are intentionally varied to observe their effect on other variables, deemed independent for their unchanged nature by other variables.

Dependent Variable

a variable in an experiment or model whose value depends on the effects of other variables, often denoted as the output or outcome variable.