"Creative Accounting" may be used to:
(i)Manipulate profits - boosting them to increase share prices,or "smoothing" profits to show similar amounts year on year.
(ii)Manipulate ratios - key ratios that investors use can be manipulated to show a better position
A) Statement (i) is true and (ii) is false
B) Statement (i) is false and (ii) is true
C) Both statements are true
D) Both statements are false

Question

Quizplus · Accepted Answer

These are just two of the things that can happen as a result of "creative accounting". Whilst there are rules governing most of what accounting can do, there are grey areas which are open to interpretation - and this can lead to some manipulation of figures.

"Creative Accounting" May Be Used To