Which Statement About the Quality of Reported EPS Is FALSE

question 21

Multiple Choice

Which statement about the quality of reported EPS is FALSE?

• A)Earnings quality assessments are difficult to make and require considerable expertise in accounting and financial analysis.
• B)Reported EPS is not the precise figure that it first appears to be.
• C)It is necessary to make adjustments to reported EPS figures when making cross-sectional comparisons.
• D)Quality of earnings is generally consistent among companies in the same industry.

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Definitions:

Protective Tariffs

Duties charged on imports to defend local sectors from international rivals by elevating the prices of goods from abroad.

Manufactured Goods

Products that have been processed or transformed from raw materials into finished items through the use of machinery or human effort.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, marked by high unemployment, deflation, and a significant fall in economic output.

Worst Recession

Refers to the most severe period of economic decline in activity across an economy, lasting more than a few months.