Question: Firms can engage in window dressing.. Please explain why each one of them can make the firms' financial statements look more attractive. Change asset

Firms can engage in window dressing.. Please explain why each one of them can make the firms' financial statements look more attractive.

 

  1. Change asset depreciation to a different depreciation method

  2. Short term borrowing

  3. Engaging in sales and leaseback transactions at the end of the year

  4. Sell underperforming stock and replace it with well-performing stock at the end of the year.

  5. Overstating assets

  6. Understating income

  7. Postpone payments

  8. Offer customer discounts

  9. Defer supplier expenses

  10. Sell off fixed assets with substantial depreciation

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Window dressing in financial statements refers to the practice of making a companys financial statements look more attractive or favorable than they might otherwise be This is often done to present a ... View full answer

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