Question

• Which of the following would not be regarded as “creative accounting”? (Select one) A. Inflating profits by passing accounting entries that are not supported by documentation.
•  B. Decreasing the amount of expenses disclosed by adding the cost of the expense to the value of an asset instead of showing it as an expense.
•  C. Postponing to the next financial period, the passing of accounting entries for costs incurred in the current year.
•  D. Passing accounting entries that are fully supported by valid documentation.
•  E. Reflecting assets that belong to someone else on an entity’s financial statements.

Answer 1

 D. Passing accounting entries that are fully supported by valid documentation