In the Sweat Construction Case, the Company Tried to Manipulate

question 24

Multiple Choice

In the Sweat Construction case, the company tried to manipulate earnings through the use of which accounting technique

• A) Cookie jar reserves
• B) Lease capitalization
• C) Percentage of completion method
• D) The Big Bath accounting

---

Definitions:

Tax-loss Selling

The practice of selling securities at a loss to offset a capital gains tax liability.

Capital Losses

The loss incurred when a capital asset is sold for less than its original purchase price.

Endowment Funds

Long-term funds established by donations that are meant to support a particular organization or cause, where the principal remains intact and the investment income is used for specific purposes.

Investment Time Horizon

The length of time an investor expects to hold an investment before taking the money out.