Which Statement Is Correct

question 36

Multiple Choice

Which statement is correct?

• A)The amount and types of excessive accruals are directly related to earnings quality.
• B)Excessive accruals are transparent and improve the quality of financial reporting.
• C)Users can routinely determine the contractual incentives causing excessive accruals.
• D)Users like earnings that closely correspond to reported results without management bias.

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Definitions:

Book Value

The net value of a company's assets found on its balance sheet, minus liabilities, often compared to market value for analysis.

Market Value

Market value is the existing price point at which you can buy or sell an asset or service within a marketplace.

Consolidated Financial Statements

Financial statements that aggregate the financial position and operating results of a parent company and its subsidiaries.

Intangible Assets

Non-physical assets owned by a business that can produce future economic benefits, such as intellectual property, goodwill, and licenses.