A Financial Manager's Goal of Maximizing Current or Short-Term Earnings

question 71

Multiple Choice

A financial manager's goal of maximizing current or short-term earnings may not be appropriate because

• A) it fails to consider the timing of the benefits.
• B) increased earnings may be accompanied by unacceptably higher levels of risk.
• C) earnings are subjective; they can be defined in various ways such as accounting or economic earnings.
• D) all of these.

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Definitions:

Prenumbered

Prenumbered refers to documents or forms that are sequentially numbered in advance to help ensure completeness and control over paperwork, useful in accounting and inventory management.

External Auditors

Independent accounting professionals who examine the financial records and business transactions of a company to ensure the accuracy and integrity of its financial statements.

Control Activity

Actions, policies, and procedures implemented by an entity to minimize risks and achieve its objectives.

Cash Drawer

A small drawer in a cash register or point of sale system used for storing cash and other payment media during business operations.