Managers May Engage in Classification Shifting By

question 175

Multiple Choice

Managers may engage in classification shifting by:

• A) reporting sales to fictitious customers to inflate reported revenues.
• B) reduce estimates of accrued expenses to inflate reported net income.
• C) reporting operating expenses as nonoperating expenses to inflate reported operating income.
• D) increasing estimates of accrued expenses to inflate reported net income.

---

Definitions:

Factory

A building or complex of buildings where goods are manufactured or assembled chiefly by machine.

Foreign Investment

The inflow of capital from external sources into a country to purchase assets, buy stocks, or fund projects, enhancing economic growth.

Interest Rates

The percentage charged or paid for the use of money, typically by a bank or financial institution on loans or savings.

Economy

The collective system of production, consumption, and trade of goods and services within a particular area or country.