Which of the following would most likely be considered intentional misapplication of accounting principles on financial statements?
A)A capital lease is presented as periodic rent expense rather than interest and depreciation.
B)A deferred tax asset is reduced to zero with a valuation allowance.
C)Insurance is amortized.
D)Revenues for up-front fees are deferred rather than recognized immediately.

Question

Quizplus · Accepted Answer

Intentional misapplication of accounting principles involves manipulating financial statements to mislead investors or stakeholders. Presenting a capital lease as periodic rent expense rather than interest and depreciation would misrepresent the company's financial position and performance. B, C, and D are legitimate accounting practices.

Which of the Following Would Most Likely Be Considered Intentional