If a publicly traded company is trying to maximize its perceived performance, as reported to decisions makers external to the corporation, the company is most likely to understate which of the following on its balance sheet?
A) Assets.
B) Liabilities.
C) Retained earnings.
D) Contributed capital.

Question

Quizplus · Accepted Answer

If a company wants to maximize its perceived performance, it will understate its liabilities on the balance sheet. This is because higher liabilities indicate higher financial obligations, which can be perceived as a risk to investors or other external decision makers. By understating liabilities, the company can make its financial position appear stronger and more favorable.

If a Publicly Traded Company Is Trying to Maximize Its