CFA Practice Question

There are 90 practice questions for this study session.

CFA Practice Question

Using extraordinarily long depreciable lives for assets is an example of ______
A. using loopholes or bright-lines in accounting principles to structure transactions to achieve a desired outcome that differs from the economic structure of the transaction.
B. using unrealistic or inappropriate estimates and assumptions to achieve a desired outcome.
C. stretching accounting principles to achieve a desired outcome.

User Contributed Comments 4

User Comment
moalrahma dont B and C mean the same thing? can someone clarify please
praj24 "Extraordinary" hence unrealistic/inappropriate
ascruggs92 Stretching the rules would be capitalizing and depreciating costs that would normally be expensed. This situation is more accurately describe as the act of using unrealistic or inappropriate assumptions.
NOBA No. B talks about estimates and assumptions, namely unrealistic or inappropriate estimates and assumptions while c refers to stretching the accounting principles. So it's principles vs estimate and assumptions. These - estimates and assumptions differ from accounting principles.
You need to log in first to add your comment.