Which of the Following Is Not a Likely Benefit of Including

question 9

Multiple Choice

Which of the following is not a likely benefit of including a highlights statement in the annual report of a business?

• A) It provides unskilled readers of the report with a simple summary of key financial indicators
• B) The statement is regarded by many readers as being highly informative
• C) Performance indicators can be calculated and then clearly set out in the highlights statement
• D) Management can select what items are to be included in the report

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Definitions:

Revenue Recognition

The accounting principle that dictates the process and timing of recognizing revenue in the financial statements, typically when it is earned and realizable.

GAAP

Generally Accepted Accounting Principles, a collection of commonly-followed accounting rules and standards for financial reporting in a particular jurisdiction, notably the United States.

Cookie Jar Reserves

Accounting practices where companies set aside reserves during good financial periods to smooth out earnings in future, less favorable periods.

Estimated Obligations

The predicted liabilities or commitments a company expects to incur in the future, often found in financial planning and budgetary processes.