In Examining the Issue of Whether the Choice of Accounting

question 48

Multiple Choice

In examining the issue of whether the choice of accounting methods affects stock prices,studies have found that

• A)the decision between LIFO and FIFO for inventory accounting can significantly affect stock prices.
• B)a firm can affect its stock price if it either withholds information or provides incorrect information.
• C)accounting changes that increase accounting earnings also increase stock prices.
• D)switching depreciation methods can significantly affect stock prices.
• E)the choice between the percentage-of-completion or the completed-contract method for construction projects affect stock prices.

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Definitions:

Performance Evaluation

A method or process used to assess an employee's job performance and productivity in relation to established criteria and objectives.

Actual Sales

Actual sales refer to the real revenue generated from goods or services sold by a business within a specific period, as opposed to projected or estimated sales.

Results Method

A performance evaluation approach focusing on the outcomes or outputs of an employee’s work rather than the process.

Forced-Distribution System

A performance management system where employees are ranked in comparison with each other and placed into predetermined performance categories.