Upon Reading the Notes to the Financial Statements of KAR

question 18

Multiple Choice

Upon reading the notes to the financial statements of KAR Ltd., you notice that the policies they have chosen tend to be deferring and amortizing both revenue and expenses.This approach leads you to believe that KAR Ltd.is employing a(n) :

• A)Income tax minimization strategy.
• B)Profit maximization strategy.
• C)Smoothing strategy.
• D)Income tax maximization strategy.

---

Definitions:

Labor Laws

The set of legal regulations governing the rights and duties between employers and workers, including working conditions, wages, and work hours.

Exploited

Utilized to the fullest extent often at the expense of fair treatment or benefit.

Ethical

Pertaining to moral principles or practices that govern a person's behavior or the conducting of an activity with respect to what is right or wrong.

Financial Statements

Documents that provide an overview of a business's financial condition, including balance sheets, income statements, and cash flow statements.