DQ-2 - meaningful financial ratio then it must take do the...

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Explain how a corporation may use techniques to make their financial statements look better than they really are. Support your answer with an example. Financial statements of an organization are very important aspect of the complete working of it. The company is going in loss or making profits , what are the areas in which finance can be adjusted etc. all these and many more features are entirely dependent on the financial statements. The finanacial statements are computed with the help of financial ratios. It helps in giving clues and symptoms to the accountant regarding the financial condition of the organization. If it is going well then also the members of the organization should take steps to do further improvement in it. If the organization wants to obtain a
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Unformatted text preview: meaningful financial ratio then it must take do the following--Comparison of the finanacial ratio to the previous years trend. -Must be comparable to the industry norm.-Also comparable to other competitive companies. All the financial matters should be updated as soon the accounts are paid or received by some source. The manual system may sometime lack the regularization which may cause havoc. The computerized system will save time, increase efficiency and also prevent any kind of discrepancy in marinating the record. For example- if we take a simple example of a school and its financial record we will see that if its good then the school will provide more services to the students....
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