The senior manager is suspicious of a local manager’s accounts and thinks that the profit performance may have been overstated. Which of the following would be a plausible explanation of an overstatement of profit?
A、Delaying payments to payables
B、Shortening the useful economic life of a non-current asset
C、Overstatement of a prepayment
D、Overstatement of an accrual
A、Delaying payments to payables
B、Shortening the useful economic life of a non-current asset
C、Overstatement of a prepayment
D、Overstatement of an accrual
【参考答案及解析】
Delaying payments to payables affects cash, not profit. Shortening the useful economic life of a non-current asset would reduce profit, and overstatement of an accrual also reduces profit.
Delaying payments to payables affects cash, not profit. Shortening the useful economic life of a non-current asset would reduce profit, and overstatement of an accrual also reduces profit.