Which of the Following Is Not a Form of Earnings

question 135

Multiple Choice

Which of the following is not a form of earnings management?

• A) Timing of booking of sales
• B) Attaching values to contracts for purposes of booking revenue
• C) Shipping to warehouses to book sales
• D) Postponing booking returns
• E) All of the above are forms of earnings management

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Definitions:

Percent Change

A mathematical calculation that indicates the degree of change over time, represented as a percentage.

Sales

Sales represent the transactions involving the exchange of goods or services for money, reflecting the primary revenue-generating activities of a business.

Acid-test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its quick assets, excluding inventory.

Quick Assets

Quick assets are assets that can rapidly be converted into cash, excluding inventory and pre-paid expenses, often used in calculating liquidity measures.