Accruals That Are Based on Estimated Changes in Fundamental Economic

question 47

Multiple Choice

Accruals that are based on estimated changes in fundamental economic performance of the firm are:

• A) Discretionary accruals
• B) Nondiscretionary accrual
• C) Operating accruals
• D) Cookie jar accruals

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Definitions:

Long-Term Asset

A long-term asset is an asset that is not expected to be converted into cash within a year and is used over a long period, such as property, plant, and equipment.

Intangible Asset

An asset that lacks physical substance and usually is very hard to evaluate, such as patents, trademarks, and copyrights.

Lease Term

The period for which a lease agreement is effective, specifying the duration for which the lessee has the right to use the property.