A company decides to switch inventory costing methods to minimise income taxes paid.Which type of 'creative accounting' option was used by the company?
A) Timing of transactions
B) Disclosure of transactions or events
C) Choice of accounting policies
D) Estimates or predictions of future events

Question

Quizplus · Accepted Answer

The company used the choice of accounting policies to switch their inventory costing method in order to minimize income taxes paid. This is a form of "creative accounting" where companies choose accounting policies that achieve their desired financial or tax outcomes.

A Company Decides to Switch Inventory Costing Methods to Minimise