The main difference between a discretionary and nondiscretionary accrual is:
A. Discretionary accruals are items that management has full control over
B. Discretionary accruals always lead to an increase in earnings
C. Discretionary accruals arise from transactions considered normal for the firm
D. Discretionary accruals are based on changes in the fundamental performance of the firm
Answer: A
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a. ($2,800). b. ($2,000). c. $400. d. $2,800.
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