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.
D) Fewer total assets.

Question

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.
D)	Fewer total assets.

Quizplus · Accepted Answer

A firm that uses more aggressive accounting practices would report higher profitability by using accounting methods that make revenues look higher and expenses look lower, thus increasing the net income. However, this may not necessarily reflect the true financial health of the company.

The Financial Statements of a Firm That Uses More Aggressive