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      Question

      From the following, which is/ are manipulation of

      financial statements? i. Shifting expected bad debts to later period ii. Recording bad debt as looses in current period iii. Recording future expected income in the current period iv. Booking current revenue to a later period
      A Only i and ii only Correct Answer Incorrect Answer
      B Only i and iii only Correct Answer Incorrect Answer
      C Only i, ii and iv only Correct Answer Incorrect Answer
      D Only i, iii and iv only Correct Answer Incorrect Answer
      E All the above Correct Answer Incorrect Answer

      Solution

      Recording bad debts as losses is following conservatism principle of accounting as bad debts are likely to become losses.

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