Each of the following can be a motivation to record a secret reserve except for:

Question

Quizplus · Accepted Answer

Recording a secret reserve to overstate net assets and equity is not a motivation, as it would give a false impression of financial stability and performance. The other options may be motivations for recording a secret reserve, such as understating net assets and equity to avoid scrutiny or taxes, recording amounts in the name of prudence to prepare for future uncertainties, and recording amounts to get tax deductions.

Each of the Following Can Be a Motivation to Record