All of the Following Situtations Below Might Indicate a Company

question 39

Multiple Choice

All of the following situtations below might indicate a company has a low quality of earnings except

• A) A lack of disclosure about guaranteed payments that were mentioned in the MD&A of the annual report.
• B) Maintenance costs are capitalized and then depreciated.
• C) Revenue is recognized when earned.
• D) Adoption of a different inventory method for each of the last three years.

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Definitions:

Formal Rulemaking

A process in administrative law where rules are made by government agencies following a formal procedure that includes public notice and the opportunity for public comment.

Rulemaking Procedure

The formal process by which government agencies establish, modify, or repeal regulations and legal norms.

Administrative Law Judges

Official who presides over trial-like hearings within administrative agencies, making decisions on disputes within the agency's purview.

U.S. District Court

The general trial courts of the United States federal court system, where civil and criminal cases are filed and heard.