I recently applied to a few schools for transfer and on the application it asked "Do you wish to report any AP Scores?" I've taken 5 AP Exams, and I didn't do as well as most applicants probably do. I passed all except 1, but I only liked my scores for two of them so those are the ones I reported. If by chance I get accepted and have to send my scores for verification, will they nullify my acceptance after seeing my other 3 AP scores?
I don't believe they'll nullify an acceptance over that.
In general, there's nothing wrong with reporting AP Scores, even failing ones. Colleges appreciate the effort and would have improved your odds. Now that you're in, even the failure shouldn't change much since it's (at worst) a neutral.
As long as you didn't falsely report any scores—i.e. the ones you did report were correct—you shouldn't have a problem. Reporting AP scores is optional basically everywhere and applicants are free to omit scores they don't want to report (it's even in the wording of the question you quoted here). AP scores really don't play much of a role in the admissions process anyway; they're mainly useful for placing out of courses once you're at college.
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I applied for very competitive schools, does that apply for their admissions as well?