ABSTRACT
In gauging the amount of an organization’s net assets, total liabilities are deducted
from total assets. Accounting irregularities of owing less sometimes occur together
with overstatement of assets as set out in Chapter 5. Keeping other variables intact, the
understatement of an organization’s liabilities portrays an illusion of having more net
resources than the organization in question actually has. In essence, the degree of an
organization’s future sacrifices (in terms of future settlement of its present obligation)
is suppressed.
