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AnnZ [28]
3 years ago
7

When analyzing financial statements it is important to recognize that accounting distortions can arise. Accounting distortions a

re those things that cause deviations in accounting information from the underlying economics. Which of the following statements is not correct? Accounting distortions:
A. can arise as management may deliberately manipulate financial statements.
B. arise often through application of (correct) accounting principles.
C. can affect the quality of earnings.
D. arise if the stock market is not efficient.
Business
1 answer:
Lunna [17]3 years ago
5 0

Answer:

The correct answer is B. arise often through application of (correct) accounting principles .

Explanation:

Accounting analysis is an important precondition for an effective financial analysis. This is because the quality of the financial analysis, and the inferences made, depends on the quality of the implicit accounting information, the raw material for the analysis. Even though the accounting according to the accumulation principle allows to perceive the financial performance and condition of a company, which is not possible in the case of cash-based accounting, the imperfections of the company can distort the economic content of the financial reports.

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The following information is available for Amos Company for the year ended December 31, 2017. Balance of retained earnings, Dece
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Answer:

The retained earnings of Amos company for the year ended 31st December 2017 is $1,016,400.00  

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In calculating retained earnings for 2017, I began with prior year retained earnings of $866,000,deducted depreciation net of taxes not recorded previously.

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