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Technique of Creative Accounting

>> March 23, 2009

Many accountants think that accounting is just science and art can not be include in accounting . But this is wrong accounting is also art and many creative works can be include in it . The following video can explain the technique of creative accounting . If you can not understand it I am also explaining technique of creative accounting in very simple and plain English what is in Video .

" Max Bialystok is a unsuccessful producer with no money left produce any plays and the plays he might ever produce are always a complete failure. So, one day, an accountant, Leo Bloom, comes to his office and tells him about the "creative accounting" which is: If someone is certain that a play is about to fail, he can make more money than he would make if it was a success. That happens because he will raise more money than needed to produce the play (if the play costs f.e 1000 dollars, he'll raise 1000000 dollars). When the "Creditors", the people who give the money to the producer, give an amount of money they own a part of the play's profits. For Example, if someone gives 500 dollars for the play, he owns 20 percent of the play and if the play is a success, he takes the 20 percent of the profits. A producers can possibly in a variety of people sell the 100 percent of the play, right ? But in that case, it was a creative accounting because they would sell more than 100 percent of the play (f.e 5000 percent) and collect lots of money. If the play fails, there are no profits and so, the creditors do not expect to gain any money. So, they'll find the worst play ever written, to be sure that it will fail. They'll produce it with very little money and when it fails, they'll take the rest of the money and go to Rio ! "

See the Video for learn Creative Accounting Technique . In this video Natasa of Cinamaniac22 channel of YouTube has produced creative accounting discussion in very interesting way . It will also entertain to you .

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