Which of the Following Groups on the Earnings Management Continuum

question 81

Multiple Choice

Which of the following groups on the earnings management continuum are always considered ethical?

• A) Savvy transaction timing and aggressive accounting
• B) Aggressive accounting and fraudulent reporting
• C) Deceptive accounting and savvy transaction timing
• D) There is not a clear definition as to which of these are ethical and which are not

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Definitions:

Maturity

Maturity is the date on which the principal amount of a bond, loan, or other financial instrument is to be repaid in full to the investor or lender.

Stated Interest Payment

The amount of interest that a bond or loan promises to pay to its holder, usually expressed as an annual percentage of the principal.

Coupon

The interest rate paid by a bond, typically expressed as an annual percentage of the bond's face value.

Income Bond

A type of debt security that only pays interest if the issuer has sufficient earnings.