Concept explainers
(a)
Financial Aid: It refers to a grant provided by state, federal government school, colleges, foundations, and corporations in the form of scholarship, loan or paid employment for helping the students in meeting their studying fees.
Earnings Management: It refers to the practice of adopting certain accounting strategies and techniques which would make a company’s financial position look better and positive to its users of the financial information.
To discuss: whether each of the given actions to increase the chances of receiving financial aid is ethical.
(b)
To explain: the reasons for a company to want to overstate its earnings.
(c)
To explain: the reasons for a company to want to understate its earnings.
(d)
To state: the circumstances under which an otherwise ethical person might decide to illegally overstate or understate earnings.
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FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
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