If Management Is Manipulating Earnings to Achieve Performance Targets, What

question 7

Multiple Choice

If management is manipulating earnings to achieve performance targets, what outcome may result?

• A)Net income may exceed cash from operations.
• B)Cash from investing activities will exceed cash from financing activities.
• C)Cash will experience a net decrease.
• D)Total assets will increase.

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Definitions:

Credit Sales

Transactions in which goods or services are provided to a customer with the agreement that payment will be made at a later date.

Financial Statements

Papers detailing a corporation's fiscal health through various financial records such as balance sheets, income statements, and cash flow reports.

Small Co.

A colloquial term generally referring to a small company or corporation with limited resources and market share.

Recognized as Shareholder

Being officially acknowledged or identified as having legal ownership and rights in a corporation's shares.