Income-Smoothing Has Been Applied to a German Subsidiary of Company

question 19

Multiple Choice

Income-smoothing has been applied to a German subsidiary of Company Inc,as it had an abnormally high operating income last year.The accountants working for the subsidiary would likely have:

• A)debited an expense account and credited an equity account.
• B)credited an expense account and debited an equity account.
• C)credited an expense account and debited a Provision account appearing under the Liabilities section.
• D)debited an expense account and credited a Provision account appearing under the Liabilities section.

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Definitions:

Serially

Pertaining to processes or events occurring one after another in a sequential order.

Broadbent

Refers to Donald Broadbent, a British cognitive psychologist known for his work on information processing and the filter model of attention.

Shadowing Performance

A task in cognitive research where an individual repeats auditory information immediately as it is heard, used to study attention and language processing.

Treisman

Anne Treisman, a psychologist known for her work in attention, particularly the feature integration theory, which describes how we perceive objects.