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Accrual accounting matches revenue with expenses, however accruals can be used to manipulate income and expenses....

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Accounting

Accrual accounting matches revenue with expenses, howeveraccruals can be used to manipulate income and expenses. Inthe Forbes Magazine article, “Cash Doesn’t Lie,” written by DanielFisher, the author discusses the use of negative accruals, changesto estimates and recognizing income before it is earned. Read thearticle and then:

a. Discuss the use of each of these three techniques and theireffect on current and future earnings reporting.
b. How should changes of accounting estimates that significantlyaffect income be reported? Should they be regarded as a change inaccounting principle?
c. Research revenue recognition and discuss the accounting rulesviolated that brought down the company Sunbeam.

PLEASE PROVIDE NEW DETAIL ANSWERS TO EACH QUESTION AND PLEASE NOHAND WRITTEN ANSWERS.

Answer & Explanation Solved by verified expert
3.7 Ratings (436 Votes)
ACCRUAL ACCOUNTING Accrual accounting method revenue and expences when they are incurred it is systamtic to record when the expence or revenue incurred examples of accrual accounting is expences have been incurred but not be recorded in accounts and revenue will be generated but not be recorded in accounts NEGATIVE ACCRUALS It means to spending more expences what they expect in a company or in bad position to survive is to improve    See Answer
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