Flexibility in accounting assumptions


Problem: The company X has been in business for 100 years. For the last 3 years this company reported operating losses. The controller identified three areas in which company X has some flexibility in its accounting assumptions: depreciation, bad debts, and pension accounting. How the controller can use accounting assumptions in these 3 areas to improve company's X reported earnings? Which set of financial statement users is most likely to be influenced by this earnings management?

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Finance Basics: Flexibility in accounting assumptions
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