The Client May Use a Variety of Methods to Understate

question 69

Multiple Choice

The client may use a variety of methods to understate liabilities,interest expense and long-term debt.These include

• A)Recording operating leases as capital leases to avoid putting the liability on the balance sheet.
• B)Designing off-balance sheet debt agreements with the sole purpose of keeping the debt off the books of the company.
• C)Failing to disclose loan covenants on long-term agreements.These loan covenants may restrict dividend payments or limit the amount of additional debt taken on by the company.
• D)Failing to disclose special arrangements,such as transactions with special purpose entities.
• E)Failing to disclose nonrelated-party transactions.
• F)both A and B
• G)both B and C
• H)both D and E

---

Definitions:

Specific Goal

A clearly defined and measurable objective that one aims to achieve within a certain timeframe.

Main Topics

Refers to the primary subjects or areas of interest that are being discussed or emphasized in a document, lecture, or conversation.

Subtopics

More specific areas or issues that fall under a broader category or main topic.

Type Size

The measure of the height of characters in printing, typically expressed in points, influencing readability.