Owners and managers of companies whose profits do not meet expectations are sometimes tempted to "cook the books" by manipulating the value of ending inventory.

Question

Quizplus · Accepted Answer

Manipulating the value of ending inventory can artificially inflate a company's profits by reducing the cost of goods sold, thus making the financial performance appear better than it actually is. This is considered unethical and illegal accounting practice.

Owners and Managers of Companies Whose Profits Do Not Meet