$1.$ Earnings management may be said to have occurred when a company:

a$.$Reduces accrual for doubtful debts expense where the company is close to violating a contractually imposed minimum working capital ratio.

b$.$Increases accruals of expenses in order to reduce reported profits in the case where the company is above a profit$-$based maximum limit on managerial bonus payments

c$.$ All of the other answers are correct

d$.$ Accelerates recognition of revenue so that the company moves from reporting a small loss to reporting a small profit

$2.$ Customer enters into a $15-$year contract with Supplier for the right to use a specified amount of capacity within a cable connecting Hong Kong to Tokyo. The specified amount is equivalent to Customer having the use of the full capacity of three fibre strands within the cable $($the cable contains $15$ fibres with similar capacities$).$ Supplier makes decisions about the transmission of data $($i$.$e$.$ Supplier lights the fibres and makes decisions about which fibres are used to transmit Customer$$s traffic and the electronic equipment connected to the fibres$).$

In accordance with AASB $16,$ is there a lease in the contract?

a$.$No$.$ There is no lease since there is no identified asset.

b$.$Yes. There is a lease, and Customer needs to recognise a right$-$of$-$use asset and a lease liability at the commencement of the lease.

c$.$Yes. There is a lease because Customer has the right to use the fibres.

d$.$No$.$ There is no lease because Supplier makes decisions about the transmission of data, although Customer has the right to obtain substantially all of the capacity of the cable over the $15-$year period.

e$.$Yes. There is a lease, but Customer does not need to recognise a right$-$of$-$use asset and a lease liability since Customer can apply the exceptions stated in AASB $16.$