The Main Difference Between a Discretionary and Nondiscretionary Accrual Is

question 59

Multiple Choice

The main difference between a discretionary and nondiscretionary accrual is:

• A) Discretionary accruals are items that management has full control over
• B) Discretionary accruals are based on changes in the fundamental performance of the firm
• C) Discretionary accruals arise from transactions considered normal for the firm
• D) Discretionary accruals always lead to an increase in earnings

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