If a Manager Selects an Accounting Policy to Ensure That

question 13

Multiple Choice

If a manager selects an accounting policy to ensure that the company does not violate the debt-to-equity ratio requirement of its bank loan, which of the following would be their objective of financial reporting?

• A)Minimum compliance
• B)Management evaluation
• C)Cash flow prediction
• D)Earnings management

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Definitions:

Antihistamine

A type of medication used to treat allergic reactions by blocking the action of histamine, a substance in the body that causes symptoms like itching, swelling, and runny nose.

Blood Transfusion

The process of transferring blood or blood products from one person (the donor) into another person’s (the recipient's) bloodstream.

Air Embolus

A dangerous medical condition occurring when an air bubble enters a vein or artery and blocks it, which can lead to pain, serious injury, and even death if not treated immediately.

Trendelenburg

A position where the patient is laid flat on the back with the legs elevated higher than the head, often used in medical settings to improve venous return to the heart.