1 Which of the following mechanisms least likely to discourage management manipu

Question

                                                                                                                                                                                                                                                                                                                                                                    

1 Which   of the following mechanisms least likely to discourage management   manipulation of earnings? A. Debt Convenants b. Securities regulators C. Class action lawsuits 2 High earnings quility   most likey to: A. result in steady earnings growth B. improve the ability to predict   future earnings C. be based on conservative   accounting choices 3 The best justification for using   accrual -based accounting is that it: A. reflects the company's   underlyying cash flows B. reflects the economic nature of a   nature Company's transactions C. Limits managements's discretion   in reporting financial results 4 The best justification for   using  cash -based accounting is that   it: A.is more conservative   B. Limits management's deicretion in   reporting financial results C. Marches the timing of revenue   recognition with that of associated expenses 5 Which of the following is not a   measure of aggregate accruals The change in net operating assets B. The difference between operating   income and net operating assets C. The difference between net income   and operating and investing cash flows

Explanation / Answer

(1). B

(2). B

(3).C

(4).B

(5).C

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