In Examining the Issue of Whether the Choice of Accounting

question 45

Multiple Choice

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

• A)accounting depreciation methods can significantly affect stock prices.
• B)accounting changes can affect stock prices if the company were either to withhold information or provide incorrect information.
• C)accounting changes that increase accounting earnings also increases stock prices.
• D)switching depreciation methods can significantly affect stock prices.
• E)All of the above.

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Definitions:

Supplies Used

The cost of consumables used in the operation of a business during an accounting period.

Total Liability

The combined amount of debts and obligations that a company owes to outside parties.

Total Expenses

The total amount of money spent by a business during a specific period, including both fixed and variable costs.

Total Assets

The sum of all assets owned by a company, including current, fixed, and intangible assets, reflecting the total resources it has at its disposal.