Which of the Following Accounting Practices Are Potentially Misleading or Even

question 16

Multiple Choice

Which of the following accounting practices are potentially misleading or even fraudulent?
I.writing off goodwill as an extraordinary loss
II.using accrual rather than cash basis reporting
III.off-balance sheet liabilities
IV.recognizing revenues prematurely

• A)I and II only
• B)I, II and IV only
• C)III and IV only
• D)I, III and IV only

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Definitions:

Fair Ad

An advertisement that is honest, does not mislead, and provides a truthful representation of the product or service offered.

Benefit To Consumers

The advantage or positive outcome that consumers receive from a product, service, or regulatory action, which may include cost savings, improved safety, or enhanced quality.

Competition Outweighs

The situation in which the benefits gained from competitive practices exceed any negative consequences.

State Consumer-Fraud Statute

A law enacted by a state aimed at protecting consumers against fraudulent, deceptive, and unfair business practices.