Which of the Following May Indicate a Company Is Manipulating

question 149

Multiple Choice

Which of the following may indicate a company is manipulating earnings by creating a cookie jar reserve?

• A)higher than usual revenues for the year
• B)lower than usual expenses for the year
• C)higher than usual estimated warranty liability at yearend
• D)lower than usual payables at yearend

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Definitions:

Recall

The act of retrieving information or events from memory without the explicit cues provided for in recognition tasks.

Snail

A slow-moving, terrestrial or freshwater mollusk with a soft, unsegmented body encased in a typically spiral shell.

Caterpillar

The larval stage of a butterfly or moth, characterized by its segmented body and growth through molting.

Turtle

A reptile characterized by a shell covering its body, which allows it to retract its head and limbs for protection; they can live in aquatic or terrestrial habitats.