what is the mean of window dressing .?
Answers
Answered by
2
Window dressing is actions taken to improve the appearance of a company's financial statements.
alokgupta2:
example..?
are given in the below answer
A means of creating a deceptively favourable something for apprance only
tumhare questions ka answer
what you mean windows dressing jo tumne pucha tha us ka answer
Answered by
3
Window dressing is actions taken to improve the appearance of a company's financial statements. Window dressing is particularly common when a business has a large number of shareholders, so that management can give the appearance of a well-run company to investors who probably do not have much day-to-day contact with the business. It may also be used when a company wants to impress a lender in order to qualify for a loan. If a business is closely held, the owners are usually better informed about company results, so there is no reason for anyone to apply window dressing to the financial statements.
Examples of window dressing are:
Cash. Postpone paying suppliers, so that the period-end cash balance appears higher than it should be.Accounts receivable. Record an unusually low bad debt expense, so that the accounts receivable (and therefore the current ratio) figure looks better than is really the case.Fixed assets. Sell off those fixed assetswith large amounts of accumulated depreciation associated with them, so the net book value of the remaining assets appears to indicate a relatively new cluster of assets.Revenue. Offer customers an early shipment discount, thereby accelerating revenues from a future period into the current period.Depreciation. Switch from accelerated depreciation to straight-line depreciation in order to reduce the amount of depreciation charged to expense in the current period. The mid-month convention can also be used to further delay expense recognition.Expenses. Withhold supplier invoices, so that they are recorded in a later period.
Examples of window dressing are:
Cash. Postpone paying suppliers, so that the period-end cash balance appears higher than it should be.Accounts receivable. Record an unusually low bad debt expense, so that the accounts receivable (and therefore the current ratio) figure looks better than is really the case.Fixed assets. Sell off those fixed assetswith large amounts of accumulated depreciation associated with them, so the net book value of the remaining assets appears to indicate a relatively new cluster of assets.Revenue. Offer customers an early shipment discount, thereby accelerating revenues from a future period into the current period.Depreciation. Switch from accelerated depreciation to straight-line depreciation in order to reduce the amount of depreciation charged to expense in the current period. The mid-month convention can also be used to further delay expense recognition.Expenses. Withhold supplier invoices, so that they are recorded in a later period.
Similar questions