Which of the following is NOT considered earnings management? a. “Earnings manag

Question

Which of the following is NOT considered earnings management?
a. “Earnings management” is done to project smoother earnings from year to year?
b. Management emphasizes achieving long-term results to meet financial goals
C. Management uses “cookie-jar reserves each year”
D. Executives manipulate the earnings in order to match their predetermined target Which of the following is NOT considered earnings management?
a. “Earnings management” is done to project smoother earnings from year to year?
b. Management emphasizes achieving long-term results to meet financial goals
C. Management uses “cookie-jar reserves each year”
D. Executives manipulate the earnings in order to match their predetermined target
a. “Earnings management” is done to project smoother earnings from year to year?
b. Management emphasizes achieving long-term results to meet financial goals
C. Management uses “cookie-jar reserves each year”
D. Executives manipulate the earnings in order to match their predetermined target

Explanation / Answer

Answrr)

My answer is option (b).

The reason is Earning Management is use of accounting techniques for presentation of financial statements in such a way that it produces positive impact on business activities and financial position. It just takes advantages over the usage accounting rule for inflating earning, revenue or assets. It does not give any importance for long term results that meet financial goals.

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