"Round trip" transactions primarily are utilized by companies:

Question

Quizplus · Accepted Answer

Round trip transactions are a type of accounting trick, where a company buys and sells a product or service to another company at a similar price. These transactions may result in the recognition of accounting gains without making any significant change to the company's operations. In this way, the company can manipulate its financial statements to create a false impression of its financial health. As a result, the best choice is C, which indicates that the primary purpose of round trip transactions is to recognize accounting gains without meaningfully changing the nature of a company's operations.

"Round Trip" Transactions Primarily Are Utilized by Companies