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 Cost Accounting  |  Question 14 of 45    Print  
HOW can one inflate its profits to show increased profits for any financial year ending

  
Total Answers and Comments: 1 Last Update: August 18, 2008     Asked by: arif 
  
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August 17, 2008 23:26:03   #1  
vasudeo007 Member Since: July 2008   Contribution: 64    

RE: HOW can one inflate its profits to show increased profits for any financial year ending
One of the most significant aspects of expenses is Depreciation.

By changing the method of depreciation one can inflate profits. From straight line to reducing balance method without retrospective effect can inflate profits.

Second method is to show revenue expenses as capital expenses.

Example: Revenue repairs and maintanence expenses debited to plant and machinery instead of profit and loss account etc.

Third method is appreciate assets like building plant etc. This will show better balance sheet.

Fourth method is showing capital receipts as revenue receipts like lottery winning as earning from business

Fifty method is overvaluing closing stock

Hope this answer has solved your query.

There may be more methods please update me about the same.

Vasudeo

 
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Latest Answer : One of the most significant aspects of expenses is Depreciation.By changing the method of depreciation one can inflate profits. From straight line to reducing balance method without retrospective effect can inflate profits.Second method is to show revenue ...
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