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:

Schemes

Schemes typically refer to systematic plans or arrangements for achieving particular objectives, often associated with artistic or literary patterns.

Maps

Visual representations of an area, showing its physical features, roads, or geographical locations.

Error of Format

A mistake made in the way information is structured or arranged in a document, different from content or grammatical errors.

Distracting Use

The inappropriate or excessive use of elements in communication or activities that detracts from the main message or focus.