Overstating Sales Returns or Warranty Costs in Good Times and Using

question 12

Multiple Choice

Overstating sales returns or warranty costs in good times and using these overstatements in bad times to reduce similar charges,is the definition of which of the following earnings management techniques?

• A)Taking a bath
• B)Creative acquisition accounting
• C)Creasing "cookie jar" reserves
• D)Abusing the materiality concept

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Definitions:

Budget Constraint

The limitations on the consumption choices of an individual or household given their income and the prices of goods and services.

DVD

A digital versatile disc (DVD) is a type of optical storage media used for video, audio, and data storage.

CD

A compact disc, a small plastic disc used to store data digitally, including music, images, or software.

Budget Constraint

The limits on the consumption bundles that a consumer can afford, based on their income and the prices of goods and services.