When Net Income Is High Relative to Operating Cash Flows,we

question 19

Multiple Choice

When net income is high relative to operating cash flows,we describe the firm as having recorded:

• A) income-decreasing accruals.
• B) income-increasing accruals.
• C) income-neutral accruals.
• D) abnormal accruals.

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Definitions:

Administrative Remedies

Legal measures that can be taken within the confines of a government agency's rules and regulations, often before seeking judicial intervention.

Arbitrary

Decisions or actions taken without any reasonable, logical, or fair justification.

Capricious

Characterized by sudden changes in attitude or behavior without apparent reason; unpredictable.

Abuse Of Discretion

Abuse of discretion refers to a failure to take into proper consideration, the laws and facts relating to a particular matter; an arbitrary or unreasonable departure from precedent and settled judicial custom.