Question: A manager increases reported earnings by $ 1,300 this year. This was done by reducing the allowance for credit losses by $ 500 below the

A manager increases reported earnings by $ 1,300 this year. This was done by reducing the allowance for credit losses by $ 500 below the expected amount and reducing the accrual for warranty costs expense to $ 800 below the expected amount. Explain why, other things equal, this will lower next year’s earnings by $ 1,300.

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