Q.2 Circle the correct answer (circle only one, also you must show your compu- tations) (10 Marks) (2Marks each) 1. Which of the following combinations of accounting practices will lead to the lowest reported earnings in an inflationary environment? Depreciation Method A) Straight-line B) Double-declining balance C) Straight-line D) Double-declining balance Inventory Method LIFO LIFO FIFO FIFO A. Option A B. Option B C. Option C D. Option D 2. Earnings Management with expenses means A. Capitalize it to report higher asset levels and lower equity levels. B. Capitalize it to report higher asset levels and higher equity levels. C. Expense it to report lower asset levels and higher equity levels. D. Expense it to report lower asset levels and lower equity levels. Q.2 Circle the correct answer (circle only one, also you must show your compu- tations) (10 Marks) (2Marks each) 1. Which of the following combinations of accounting practices will lead to the lowest reported earnings in an inflationary environment? Depreciation Method A) Straight-line B) Double-declining balance C) Straight-line D) Double-declining balance Inventory Method LIFO LIFO FIFO FIFO A. Option A B. Option B C. Option C D. Option D 2. Earnings Management with expenses means A. Capitalize it to report higher asset levels and lower equity levels. B. Capitalize it to report higher asset levels and higher equity levels. C. Expense it to report lower asset levels and higher equity levels. D. Expense it to report lower asset levels and lower equity levels