Why Are Excessive Accruals a Concern for Accounting and Financial

question 15

Multiple Choice

Why are excessive accruals a concern for accounting and financial reporting?

• A)They improve the quality of earnings of the company.
• B)They may represent unethical practices by the company.
• C)They require too much professional judgment.
• D)They result in standards overload.

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Definitions:

Lower

To decrease in position, value, or amount.

Price

The amount of money required to purchase a good, service, or asset. It acts as a signal to both buyers and sellers in a market.

Competitors

Competitors are companies or entities that operate in the same or a similar industry and vie for the same customers or market share.

Unfair Competition

Business practices that are deemed unethical or illegal, aiming to gain an unfair market advantage.