Which of the Following Is NOT an Earnings Management Technique

question 23

Multiple Choice

Which of the following is NOT an earnings management technique?

• A)Recording revenue the customer is obligated to pay
• B)Recording revenue when future services remain to be provided
• C)Recording sales that lack economic substance
• D)Including investment income or gains as part of revenue

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Definitions:

Unlever

The process of reducing or eliminating leverage (debt) within a company's capital structure.

Lend Out

The act of providing funds to another party with the expectation of being repaid, usually with interest.

Debt Issue

The process by which a government, corporation, or other entity raises money through the sale of bonds, notes, or other forms of debt.

Leverage

The practice of leveraging borrowed money to enhance the expected returns on an investment.