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Which of the Following Can Affect Earnings Quality

question 42

Multiple Choice

Which of the following can affect earnings quality?

I. Management's choice of accounting principle
II. Management's choice of dividend policy
III. Management's estimates
IV. Management's discretionary expenditures


Definitions:

Machine Hours

A measure of the amount of time a machine is in operation, used for allocating costs in manufacturing.

Spending Variance

The difference between the budgeted amount of expense and the actual amount spent.

Standard Rate

A predetermined cost or price used as a benchmark for evaluating the efficiency or effectiveness of operations.

Spending Variance

The difference between the actual amount spent and the budgeted amount for a specific period, indicating under or overspending.

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