Examples of window dressing are as follows: Cash. Postpone paying suppliers, so that the period-end cash balance appears higher than it should be. Accounts receivable. Record an unusually low bad debt expense, so that the accounts receivable (and therefore the current ratio) figure looks better than is really the case.
What is window dressing explain?
Definition: Window dressing is a technique used by companies and financial managers to manipulate financial statements and reports to show more favorable results for a period. Although window dressing is illegal or fraudulent, it is slightly dishonest and is usually done to mislead investors.
What are the forms of window dressing?
Following are the ways of window dressing in Income Statement:
- Under and over valuation of inventories.
- Excess/less creation of provision of Bad debts and Discount on Debtors.
- Excess/Less Depreciation on Fixed assets.
- Excess/less amortization of fictitious assets.
- Creation of General Reserve.
