Which of the Following Is an Example of Managing Earnings

question 27

Multiple Choice

Which of the following is an example of managing earnings up?

• A) Decreasing estimated salvage value of equipment.
• B) Writing off obsolete inventory.
• C) Underestimating warranty claims.
• D) Accruing a contingent liability for an ongoing lawsuit.

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Definitions:

Managerial Accounting

A field of accounting focused on providing financial data and analysis to managers within organizations to facilitate informed decision-making.

Internal Control System

A process implemented by a company to help ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Manufacturing Costs

The total expenses involved in the manufacture of products, including direct materials, direct labor, and manufacturing overhead.

Cost of Goods Manufactured

The total cost incurred to produce goods during a specific period, including materials, labor, and overhead costs.