Posts Tagged ‘expense’
Depreciation
Depreciation is a term we hear about frequently, but don’t really understand. It’s an essential component of accounting however. Depreciation is an expense that’s recorded at the same time and in the same period as other accounts. Long-term operating assets that are not held for sale in the course of business are called fixed assets. [...]
What is financial window dressing?
Financial managers can do certain things to increase or decrease net income that’s recorded in the year. This is called profit smoothing, income smoothing or just plain old window dressing. This isn’t the same as fraud, or cooking the books. Most profit smoothing involves pushing some amount of revenue and/or expenses into other years than [...]
What is accounting fraud?
Accounting fraud is a deliberate and improper manipulation of the recording of sales revenue and/or expenses in order to make a company’s profit performance appear better than it actually is. Some things that companies do that can constitute fraud are: –Not listing prepaid expenses or other incidental assets –Not showing certain classifications of current assets [...]