One of the major advantages of making adjustments in order to improve the quality of financial statements is that they:
A. ensure that revenues and expenses are recognized conservatively during the period in which they are paid.
B. provide an opportunity to manipulate the numbers to the best advantage of the reporting company.
C. ensure that revenues and expenses are recognized during the period they are earned and incurred.
D. ensure that all estimates of future activities are eliminated from consideration.
Answer: C
You might also like to view...
Olivia Co owns 5,600 of the 14,000 outstanding shares of Hobbitt Corp common stock and exercises significant influence over the company. During 2011, Hobbitt earns $$90,000 and pays cash dividends of $25,000 If the beginning balance in the investment account was $190,000, the balance at December 31, 2011 should be:
a. $192,000 b. $172,000 c. $180,000 d. $216,000
Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements-Interest Income (assume that cash received is equal to amount reported)-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:
A) Add to net income to arrive at net cash flows from operating activities. B) Subtract from net income to arrive at net cash flows from operating activities. C) Not used to adjust net income to calculate net cash flows from operating activities.
To become an ethical expert ______.
A. learn in a well structured environment B. practice ethical problem solving C. learn from previous ethical experts D. all of these
Use critical thinking whenever you ____.
A. take an action B. decide what to believe C. make a decision D. all of the above