Trashbin Is a Waste Disposal Company

question 17

Essay

Trashbin is a waste disposal company.Explain the effect the following actions of the management of Trashbin Company might have in managing earnings:
1.Management assigned unsupported and inflated salvage values and extended the useful lives of company garbage trucks.
2.Management assigned arbitrary salvage values to other assets that previously had not salvage value.
3.Management did not record expenses required to write off the costs of unsuccessful and abandoned landfill development projects.
4.Management recorded inflated environmental liabilities in connection with acquisitions of other companies.
5.Management improperly capitalized a variety of expenses.
6.Management did not establish sufficient liabilities for income taxes and other expenses.

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Definitions:

Revenue Accounts

Accounts that track the income generated from a company's operations, such as sales revenue, service revenue, and interest income.