Overstated their profit?

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Senior Member
Assamese -India
What is the term used when a company lies about its actual net profit to attract more investors and to appear more financially sound.

Suppose the company's net profit is 10 and they have mentioned it has 12.

And what would be the opposite of that when they try to hide the actual profit to evade tax.

Overstated their profit.
  • rituparnahoymoy

    Senior Member
    Assamese -India
    Please give us the complete sentence in which you would use each of these words or phrases.
    I am still looking for the sentence.

    But I have got some phrases with overstated and understated .
    When an accountant states that a reported amount is overstated, it means two things:
    1. The reported amount is incorrect, and
    2. The reported amount is more than the true or correct amount.
    For example, a company reports that its prepaid insurance is $8,000. However, the true or correct amount of prepaid insurance is only $7,000. The accountant will say that the reported amount for prepaid insurance is overstated by $1,000.

    Because of double-entry accounting or bookkeeping, another general ledger account will also have a reporting error. In our example, if Prepaid Insurance is overstated (too much being reported) it is likely that Insurance Expense will be understated (too little is being reported).

    US Analysis Of India: 7.5% GDP Growth May Be Overstated
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