Solution-Which an indicator of earnings management is the

Which an indicator of earnings management is the

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Reference no: EM132652529

Problem I. An indicator of earnings management is the:

A. inventory costs on the first-in, first-out basis, regardless of the physical flow of the goods

B. use of the straight-line method of depreciation for all fixed assets.

C. continued overestimation of the useful lives and residual values of fixed assets.

D. front-end loading of expenses

Problem II. Company X does not capitalize an asset leased from Company Y because it is not required to do so under GAAP. In analyzing Company X, one would capitalize the leased asset when:

A. GAAP permits the option of doing so.

B. the benefits of leasing an asset outweigh those of purchasing it

C. Company Y does not want to capitalize the leased asset

D. Company X assumes the risks and rewards associated with the leased asset

Reference no: EM132652529

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Which an indicator of earnings management is the

Reference no: EM132652529

Reference no: EM132652529

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