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Explain the Nature of and Motivations for Various Approaches for Companies

question 29

Essay

Explain the nature of and motivations for various approaches for companies to manipulate their profits through the use of expenses.


Definitions:

Noncumulative Preferred Stock

A type of preferred stock on which the right to receive dividends ends if the dividends are not declared in the year they are earned.

Undeclared Dividends

These are dividends that have been earned by shareholders but have not yet been officially announced by the company.

Cumulative

An adjective describing quantities or changes that are added together sequentially over time.

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