Accountants have the ability to choose different ways to report accounting information and this choice can have an impact on the reported financial performance and position of an entity.

1. Identify and describe in detail the different methods available when making reporting decisions for:

a. Revenue recognition

b. Accounting for bad debts

c. Inventory costing methods

2. Explain why accountants are able to choose different ways to report accounting information.

Discuss the advantages and disadvantages of being able to make different accounting choices

3. Explain how the choice of these accounting methods can be used by managers for earnings management. In your answer you may like to refer to how the assumptions and qualitative characteristics of accounting reduce earnings management.