What May Be the Effect on a Company's Financial Statements

question 32

Multiple Choice

What may be the effect on a company's financial statements in the year a company sets up a cookie jar reserve?

• A)Net income and total assets may be too high.
• B)Net income and total liabilities may be too low.
• C)Net income may be too high and total assets may be too low.
• D)Net income may be too low and total liabilities may be too high.

---

Definitions:

FISA Court

Refers to the Foreign Intelligence Surveillance Court, a U.S. federal court established to oversee requests for surveillance warrants against foreign spies inside the United States.

Sneak And Peek

Refers to a law enforcement tactic of secretly searching a property without immediately notifying the target of the search.

Agency

A legal relationship in which an agent acts under the direction of a principal for the principal’s benefit. Also used to refer to government regulatory bodies of all kinds.

Corporate Officials

Individuals who hold positions of authority and responsibility in a corporation, managing its operations and making strategic decisions.