"Creative Accounting" May Be Used To

question 11

Multiple Choice

"Creative Accounting" may be used to:
(i) Manipulate profits - boosting them to increase share prices,or "smoothing" profits to show similar amounts year on year.
(ii) Manipulate ratios - key ratios that investors use can be manipulated to show a better position

• A) Statement (i) is true and (ii) is false
• B) Statement (i) is false and (ii) is true
• C) Both statements are true
• D) Both statements are false