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Essay text:
Accounting policy choices also provide businesses with the opportunity to make choices about what accounting policies to implement.
By increasing an asset’s residual value to make it seem higher, stakeholders will be convinced that the business is liquid. Accounting policies may be changed through altering stock valuation methods to allow for better figures which satisfy the stakeholders. The straight line method is commonly used in the UK and the depreciation amount is spread equally over each accounting period when the asset is used. The reducing balance method applies “a percentage to the asset’s cost”...
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