which-of-the-following-is-true-about-earnings-management-a-it-works-within-the-constraints-of-gaap-b

Question

Which of the following is true about earnings management?
A. It works within the constraints of GAAP.
B. It works outside the constraints of GAAP.
C. It tries to improve stakeholder’s views of the company’s financial position.
D. Both B and C
E. Both A and C

Puneet Prajapati · Accepted Answer

so we will understand the meaning law. Well, we can see the concept off Dimension reporting Antarctica. Okay, so it is the authority which issues financial accounting standards or give within which every entity, every business, entity, every form, every corporation has to function. Okay, these war gets die lives. Okay, so standards, I would guess, guidelines for every form. So that so what is so that investors deception off and these financial were beaten. Okay, so we have concluded out so that that this entity issues those standards which workers guidelines for every form so that it could try to improve the perception about and this financial position for for investors. Okay. Because in Leicester, sever final and complete state in every entity. Because a lesson until investors will invest their investment amount. Okay, so the business could not be commenced. So therefore, such a voter d book the work with the prime objective off strengthening their perception about entreaties. Farage imposition. Okay, so that matches with choice. Okay, choice here. See, it means the correct choices. Choice E which says that statement statement in a option and see option. Both are correct. So Choice E is the correct answer, however, you can try Poor time Britain so far for reference. So the correct solution we ever identified as Choice E. That&#x27;s all.

Puneet Prajapati · Answer

Okay, so let&#x27;s understand the current solution. Okay, So, first, before we will write a technical decoration, managerial accounting activities. Okay, Although it will be a technical detonation. However, it will not be, you know, a little bit. Lord were confusing. Good saying dude around decision making activities based on many Gillian accounting information. Okay, so from this definition, we can extract our meaningful Don&#x27;s that That will be, you know, most most elements in explaining this internship. So it&#x27;s centered around decision making activities. Okay. The ministry LECONTE activities. Okay. No bases on board. Many Djula coping information. One. So you can also see for the company as a whole like to support. If there is a manager, so he will be He would be taking decisions based on the something information for the company of the letter. Suppose we have five business units, five different business units, five different business units off the company. Let&#x27;s suppose x in company. So they will be five different managers off off each of them business units off each of the business unit so back each of the business units decision will be taken by their respective managers. However, these managers or we can say specifically, managerial accounting activities do not include financial statement repetition by that. So because you can also Oh, I understand. Go this way. That many years I&#x27;ve never I never, ever hired for you doing a predictive dusts. They are hired for making decisions. They are higher for their insights. Okay, They&#x27;re hired for their skills, which which they have in our specific area, not a specific business on next. Okay, so from that weekend, we can grow over solution. So the correct choice, the correct choice for the problem will be a where it states that the current the manager accounting activities, the managerial accounting activities will not be well, not in would be patient off financial statements. Okay, So our correct choice for hearing problem is a because because the manager accounting activities is not concerned with financial statement. The tradition. Okay, that&#x27;s all for the solution. Thank you.

Puneet Prajapati · Answer

Okay, so having you recognition on sale. Yeah, it have you boots, then groups are services have been Yeah, introspective. Oh, I see against the Okay, so we have a deep have been your combination. Okay. What? It sees that that would make it live in the woods services have bean deliver. Okay, irrespective of this, you know, pavement against the. So let&#x27;s understand this to an example. Let&#x27;s support this, Mr Reed. Okay. Business order. And there is Mr C. Who is that estimate? So, Mr Mystery, his transfer is selling books off. That&#x27;s $100. So Mr C said Cruz said in the diving pay $100. So this is a basically pregnancy come back to haunt. So this is exactly maybe we know the ignition concept, Understand? So this is a better team. The sale has been made on the basis. Now what efforts? They have ended up a commission conservancies or they believe recognition concepts is that Mr A Is is likely due. All right, is surely the card the credit sale off $100 in his book. Several problems, irrespective off immediate cash payment from Mr C or more. Okay. Even if the payment will be received in subsequent years. Also, Mr A Wilby library record this same, okay. Or this amount. And it&#x27;s saying or this amount the current, even if the payment will be deceiving subsequent and that this one of the principal. Okay, so we have a new recognition is also on the gap. Okay. That says that even if the payment will be received in subsequent years, Okay, the sale will be recognized then that would with just Okay, So our solution matches choice. See that received the cash off. Kashmir isn&#x27;t RD right yet? Okay, so you can write on your notebooks for accidents apart here. However, Joy sees the correct answer. That&#x27;s all for our submission and you.

Puneet Prajapati · Answer

No, let&#x27;s understand this solution from the given ing some elected. Suppose we have into t X bye and sick exes dealing in furniture in sickness and by is dating in construction. Insect is dealing in. That&#x27;s it building. So what will happen? The gas, Mr Church, Or these have been new structure. They live in the structure. Or we can say that revenue recognition, instability We were different in this case. In this case, in this the expensive recognition structure. Well, we&#x27;re different in this case, in different in this case, this case and why? Why doesn&#x27;t it happen? Let&#x27;s understand. Date is an entity which feet last fsb financial. Thank you. Standards boot this entity Shoes stand good in relation, following in relation to fall in the circulation off expenses. And you know what happens that when such an entity will issue standard village of different or North district uniforms? Sanders for this hanky, I want the sanctity of this entity. They will be nor difference. Or we can say there will be complete transparency in revenue recognition structure for this entity. This and this. And apart from these entities, you even have complete transmitting seeing it evasion of a ninja statements. No, who will be required to comply with the standards? Let&#x27;s just also understand back. So an inter dude an entity gap stuck news. You know what will happen? So the case off the given problem the execution is Hey, the correct solution is which states that if Angelica stand for export the Financial Cody&#x27;s 100 sports, it&#x27;s an English plane. And given you and non profitable organization, it sets the standers sexy convention reporting standards for different entities fall in the gap. So the car exhibitionists Thank you.

Puneet Prajapati · Answer

Okay, so let&#x27;s understand the current solution to win something. But first of all, before the example, we draw the first of all, understand the actually question behind this solution and works it. What is it? Let&#x27;s see. Sits minus liabilities. Equal. Get it? Actually, capital is used in traditional needs as a loan in relation, sophisticated. But just to quit, you stop already. Our date is Oh, precise differences. They have presides differences between stockholder&#x27;s equity and capital. However, we will understand. Listen later when we will face the problems. Okay, so we have our question said minus liability was to stop really pretty no electricity. Understand this equation, Tau Example. Because the visit will be a little complex at getting states to understand this. No, let&#x27;s see. Mr Green has business off blue business off and currently it has. It&#x27;s it&#x27;s oh, dollars I did and liabilities off. Daughter 200 through there licked Lewis. So what do we have? We have Mr Ri, which is dealing in business off clothing, like chasing the flutes from locally from Lydia are outside of the country importing, you know, a good material. Some outside of the country, local boundaries and selling the setting, the builds and about my beating. In such business, Mr Lee has a community sets off about 500. These events will be in terms off gash. Know what is in a second? That&#x27;s it is in a mountain which a person or an entity is likely to the sea. Our is expecting to receive in some later point in time. So a sex could be gash, which is which is guaranteed with the current, which the entity it&#x27;s currently holding in its bank guard in, you know, cash reserves or doctors. It is that the person who would like you to pay the person for whom subject is that considered as sex. So presently, Now, what are the liabilities? Lab, please. Uh, those are mom&#x27;s, which we have to be. Who? Other person. Like participles. We have predators or shock them. Decked Logan Back short, Longtime necked. These are other financial obligations which B which we have to pay off during the lifetime of the business. I love What? The accounting. A question in place. Let&#x27;s understand this. Also, a sick Linus like beauties equally do stock no water. What is the amount of dissecting never take something. What is the example of liabilities? 100. Now, what is this? Top of very pretty hours. So we have understood the meaning. Love This one, This one? No, we really understand the meaning of this. And after that, we will come to the conclusion that how many type off combinations we can produce with this question, So that will be able to go on. Push. So what is this top of that? It would be It is. It is the amount there, the business man whores in the business as is, huh? Only money was realization depends upon liquidation. Liquidation? Oh, business having bean there done such definition. It is simply the amount that deck mystery that Mr Three Wars in the business as his own darts a simple list. Thank you, Mr V. As a community of equity, wealth equally means on his own. Mr. Ray has a commuter belt off dollars. 300 in his business. After being off the liabilities from the A community, a sense and what it would be the insects. But maybe gash dictators, order receivers or what type of bank deposits he had so out after the bingo after thing off celebrities. Dollars. 200 from the assets. Whatever be the long left? After such activation off of the exits, whatever will be left will be actually beautiful to Mr as a business. And this will be start hold equity. So no. So the correct solution. So the correct choice. So the correct choice off off problem 13 is deep. Howdy. Because, Indy, this is I send less liabilities equal to stock up. It took it. So this is about the Actually, this is the actual question is that&#x27;s it minus liabilities? Because just talk it is. And from this a question. We cannot be right this equation in anything so that this white this option is not today and that this does not represent the actual impression. So the current choice a problem dirtiness. And thanks for the

Megha Nayar · Answer

Hi everyone. Today we will be solving problem for from Chapter 10 which discusses correct of taxes. Um, and asks us which of the following statements about these taxes are not true. So going in order the first statement statement Choice A says that economists prefer them to command and control. And this statement is true. Economist generally prefer taxes because taxes offer more flexibility. Um, they because taxes are passed on to companies that are producing these goods that are causing these negative externalities By giving these taxes, it&#x27;s going to give these companies economic incentive thio lower their production and therefore lower the you know, if they&#x27;re emitting pollution in the air or, um, whatever other negative externality they might be producing, they will lower that on. Essentially, you can kind of think that think of this as a price to the right of pollution. The price to the right of causing some sort of negative externality by putting a tax on cos sort of allows companies to find their most optional point of production. That takes into account the tax, and in that way it is better than just putting on regulations. Um, on the second choice they raise government revenue. This is true about taxes. They do raise government revenue because the tax money goes to the government. And that&#x27;s just how taxes work. And then we&#x27;ll just skip on over to Choice T. And this is also a true statement. They do reduce the client excellent market. When companies are taxed, they will naturally choose to produce less of the product because they have to pay this tax. Um, and so that is what&#x27;s going to happen. So the choice that is correct is Choi See, that caused a great loss. Um, corrected taxes do not caused by a dead weight loss. So most taxes in the economy do distort the economy. They do cause mark inefficiency, which leads that we lost but cracked your taxes are only put into place in economies with externalities on. Generally, we&#x27;re trying to fix a negative externality on In these kinds of economies, people don&#x27;t have just security of finding the optimal market efficiency. They also care about the social social opt socially optimum, um, optimal point. And that&#x27;s the point at which people are bystanders are not being adversely affected by negative externalities. So, for example, by centers of operating in too much pollution that is caused by aluminum production. Uh, and so corrupted taxes help get these kinds of economies closer to that optimal point on correct all the negative externalities that might be in the market. So in this case, corrective externality Sorry. Corrective taxes due not cause that would last. Therefore, the correct answer to this question is Tracy. Yeah. And you so much.

Problem

Which statement is most directly affected by a ch…

Problem 16 Medium Difficulty

Which of the following is true about earnings management?
A. It works within the constraints of GAAP.
B. It works outside the constraints of GAAP.
C. It tries to improve stakeholder’s views of the company’s financial position.
D. Both B and C
E. Both A and C

Answer

Related Courses

Principles of Accounting Volume 1: Financial Accounting

Related Topics

Discussion

Top Educators

Recommended Videos

Watch More Solved Questions in Chapter 9

Video Transcript

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting

What do you need help with?

Textbooks

Ask a question

Courses

AI Tutor

Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon CooperPrinciples of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting