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In this article, we will focus on under-standing and analyzing the typical accountsof Chinese financial statements, includingthe balance sheet and income statement.Accounts are generally incorrectly prepared.This can be due to several factors, incom-petence, as well as more serious cases ofdeliberate attempts to deceive. Regardless,accounts can be understood and errors orspecific acts of misrepresentation uncovered.We will conduct some simple analysis todemonstrate how these can be spotted.