All of the Following Are Reasons That One Should Be

question 3

Multiple Choice

All of the following are reasons that one should be cautious in interpreting financial statements EXCEPT

• A) firms can take steps to over- or understate earnings at various times.
• B) it is difficult to compare two firms that use different depreciation methods.
• C) financial managers have quite a bit of latitude in using accounting rules to manage their reported earnings.
• D) All of these choices are correct.

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Definitions:

Stress

A psychological and physical response to demands or threats, leading to a state of strain or tension.

Physiologically

pertaining to the branch of biology that deals with the normal functions of living organisms and their parts.

Emotions

Intricate mental conditions consisting of three key elements: the personal feeling of the individual, the body’s reaction, and the manner in which this is behaviorally or expressively shown.

Readiness

The state of being fully prepared or in a suitable condition to undertake a specific task or to deal with certain situations.