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Credit card companies are notorious for manipulating financial statements and hiding information to make it appear that the business is more solvent than it is. It is also possible for companies to misrepresent the number of people who shop at the store.
DuPont analysis from financial statement manipulation example , source:en.wikipedia.org
Some people simply do not care about the fact that an organization’s financial statement is designed to fool people into thinking the financial statements are sound. To these people, the only purpose of the statements is to look good to make the lending companies go easier on the organization.
Every organization should care about financial statements because it determines if the organization can sustain itself in the long run. If an organization is going to have many people over the long term, then it is going to have to be good at turning its financial statements around. Unfortunately, there are financial statement manipulation examples which can sometimes be perfectly innocent, but that doesn’t make it any less serious. Organizations that cannot maintain balance sheets because of lack of paperwork, lack of accurate statements and lack of training are the types that are likely to be subject to fraud.
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There are many scam products out there to lure people into thinking that the organization is going to be able to stay in business. While a fraudulent organization can make people believe they are making good financial decisions, they can also do the opposite. Many scam companies will tell people that they can get the organization going in the short term, but that they can only make it go for a few months before they have to start to liquidate their assets. The organization is only making about a year’s worth of revenue when they are making it several years for the investment.
Another example of financial statement manipulation is trying to double that amount of revenue each month by holding a sale. While this may sound like a good thing, it can result in people being ripped off by scams. When someone tries to double revenue and doesn’t do anything about it, the organization is likely to end up with some very bad accounting.
Learning AI if You Suck at Math — P4 — Tensors Illustrated with Cats from financial statement manipulation example , source:hackernoon.com
Debt collectors have often been accused of defrauding credit card companies out of millions of dollars of revenue. Most of the time, when a company uses its collection methods against an organization, the creditor can make a great deal of money. The organization can sue the credit card company for the amount of money it has lost through the collection, but the most important thing is that the collection methods will cause the organization a great deal of pain and suffering.
The financial statement manipulation example of the credit card companies is a bit extreme, but these are some of the most common examples that people believe when they read about these instances. When individuals hear about this type of cheating, they often assume that it is only an isolated incident. Everyone needs to learn about the effects of financial statements manipulation to make sure that it doesn’t happen to them.
TRIAL BALANCE PRACTICE from financial statement manipulation example , source:vorugantyfinancialaccounting.blogspot.com