The financial statements of a firm that uses more aggressive accounting practices would be likely to report:
A)Higher profitability.
B)Higher dividends.
C)Higher liabilities.

Question

Quizplus · Accepted Answer

Firms that use aggressive accounting practices tend to inflate their earnings by recognizing revenue earlier than usual, delaying expenses or not reporting all expenses, overstating the value of assets, etc. This can lead to higher reported profitability. However, it does not necessarily affect dividends or liabilities.

The Financial Statements of a Firm That Uses More Aggressive