Which Statement Is Correct

question 55

Multiple Choice

Which statement is correct?

• A)If the reported net income is consistently close to or less than cash from operating activities, the company's net income or earnings are said to be of a "low quality."
• B)If net income is consistently more than cash from operating activities, the company's net income or earnings are said to be of a "high quality."
• C)One way to evaluate earnings quality is to compare the company's net income with cash from operating activities, because accrual income are less subject to managerial bias compared with cash flows .
• D)If the reported net income is consistently close to or less than cash from operating activities, the company's net income or earnings are said to be of a "high quality."

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