An organization that seeks to fraudulently minimize its net income due to tax considerations may do so by:
A) Recording fictitious revenues
B) Omitting existing liabilities
C) Expensing capitalized expenditures
D) Underestimating warranty repairs expense

Question

Quizplus · Accepted Answer

Expensing capitalized expenditures instead of capitalizing them can artificially lower net income, as it increases expenses in the short term, which is a method that could be used to fraudulently minimize reported profits for tax purposes.

An Organization That Seeks to Fraudulently Minimize Its Net Income