Which Statement Is Not Correct

question 45

Multiple Choice

Which statement is not correct?

• A)Accruals involve uncertainty about future transactions and events.
• B)Companies must use the same accounting estimates year-over-year in preparing statements.
• C)A company can change its accounting policies if it provides more relevant information.
• D)Higher earnings quality provides users with more decision useful financial statements.

---

Definitions:

Residual

The difference between an observed value and the value predicted by a model.

Scatter Diagram

A scatter diagram, or scatter plot, is a type of plot or mathematical diagram using Cartesian coordinates to display values for typically two variables for a set of data, indicating the relationship between them.

Fitted Value

A numerical estimate or prediction obtained from a regression model that corresponds to a specific set of explanatory variables.

Starting Salary

The initial wage or remuneration an employee receives when beginning a new job.