Which of the Following Can Management Use to Create Hidden

question 89

Multiple Choice

Which of the following can management use to create hidden reserves?

• A)Accounting policy choices
• B)Accounting estimate choices
• C)Measurement choices
• D)Revenue recognition choices

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Definitions:

Sale of Equipment

The process of selling off business equipment, often recognized as a financial transaction that can result in a gain or loss in accounting records.

Direct Method

A cash flow statement reporting approach that presents major classes of gross cash receipts and payments, providing a clearer view of cash flows from operating activities.

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.