Which describes the possible effects on the balance sheet

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Problem 1: A company had not prematurely booked revenue in prior periods. However, to inflate income, the company prematurely books revenue in the current period. Pick one of the choices below that describes the possible effects on the balance sheet at the end of the current period.

a. Increase receivables or increase deferred revenues
b. Increase receivables or decrease deferred revenues
c. Decrease receivables or increase deferred revenues
d. Decrease receivables or decrease deferred revenues

Problem 2: Which one of the following statements best describes the impact of classifying trading securities as available-for-sale securities?

a. Allows a company to delay recognition of gains and losses on the income statement but does not allow the company to manipulate its total equity
b. Allows a company to delay recognition of gains and losses on the income statement and also allows the company to manipulate its total equity
c. Does not allow a company to delay recognition of gains and losses on the income statement but allows the company to manipulate its total equity
d. Does not allow a company to delay recognition of gains and losses on the income statement and does not allow the company to manipulate its total equity

Reference no: EM132979609

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