Which of the Following Can Affect Earnings Quality

question 42

Multiple Choice

Which of the following can affect earnings quality?

I. Management's choice of accounting principle
II. Management's choice of dividend policy
III. Management's estimates
IV. Management's discretionary expenditures

• A)I, II, III, and IV
• B)I, II, and III
• C)I, III, and IV
• D)I and III

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Definitions:

Decision-Making Process

A process that begins with identification of a problem and ends with evaluation of results.

Preferred Course

A path or option that is favored or chosen over others due to its perceived benefits or advantages.

Classical Decision Theory

A framework in managerial economics that outlines how decisions should be made, considering variables and outcomes in a rational and structured manner.

Satisfactory Alternative

An acceptable option or solution that meets basic requirements or needs, though it may not be the optimal choice.