A Company Decides to Meet Its Profit Target for the Year

question 24

Multiple Choice

A company decides to meet its profit target for the year by selling a piece of land, for a gain, in December, even though it believes it could have made significantly more money by waiting two months to sell the land. This is an example of

• A) Accruals management
• B) Expectations management
• C) Fraud
• D) Real earnings management

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Definitions:

Extended Periods

Lengthy durations or time frames, often referring to the operation or application of something over a long period.

Centrifugal Switch

A device that opens or closes an electrical circuit based on the speed of the rotating shaft, commonly used in motors.

Start Capacitor

A type of capacitor designed to help a motor start rotating by providing a high current boost during the startup phase.