Upon Reading the Notes to the Financial Statements of KAR

question 8

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 revenue but expensing operating costs as incurred.This approach leads you to believe that KAR Ltd.is employing a(n) :

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

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Definitions:

Normative Life Events

Typical or expected milestones and experiences that occur in an individual's life, such as starting school, marriage, or retirement.

Residency

The period of specialized medical training that a doctor undergoes after completing medical school, or the act of living in a particular place.

Development

The processes by which individuals grow and change, as well as the ways in which they stay the same over time.

Physical

Relating to the body as opposed to the mind or emotions; involving bodily movements or activities.