Question

Question 7 Not yet answered Which of the following is not an accounting method that could be chosen by a company to increase reported profits? Marked out of 1.00 Flag question Select one: O a. Understating allowance for doubtful debts O b. Changing the method of inventory valuation in a period of rising prices O c. None of the options O d. Classifying long-term receivables as current assets Oe. Changing estimates of the useful life of plant and equipment

Answer 1

Answer: recewable d) classifying long-term cis current asset. Reason: current assets are the item of Balance sheet, it doesn't affect the earning of income of company. so the classification of long-term recewable as current asset doesn't increase reported Profit. current asset significantely affect on debt of Aeret. Net on Income. on the other hand. Indesstations allowance for doubtful debt, changing of inventory valuation method in period of rising price (in case of LIFO TO FIFfo], changing estimates of useful life of Plant & machinery affect the income or could help to invelare reported profit.