Which of the Following Will Have an Impact on a Company's

question 58

Multiple Choice

Which of the following will have an impact on a company's quality of earnings?

• A)The delay of payments to suppliers.
• B)The use of monthly statements to encourage payment of receivables.
• C)The deferral of expenditures for research and development.
• D)The decision to delay the purchase of inventory until after year-end.

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Definitions:

Geometric Average

A method of calculating the average rate of return of a set of values multiplicatively linked together, commonly used to determine the performance of investments over time.

Compounding Principle

The process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.

Rate of Return

A percentage representing the gain or loss on an investment over a specified period, relative to its cost.

Statistically Significant

A determination that a result from data analysis is likely not due to chance at a predetermined level of significance.