A Wall Street Journal article noted that Apple reportedhigher income than its competitors by using a moreaggressive policy for recognizing revenue on futureupgrades to its products. Some contend that Apple’squality of earnings is low. What does the term “quality ofearnings” mean?

A Wall Street Journal article noted that Apple reportedhigher income than its competitors by using a moreaggressive policy for recognizing revenue on futureupgrades to its products. Some contend that Apple’squality of earnings is low. What does the term “quality ofearnings” mean?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 44MCQ: When a Dupont analysis reveals that a company has much higher than average asset turnover and much...

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Question

A Wall Street Journal article noted that Apple reported
higher income than its competitors by using a more
aggressive policy for recognizing revenue on future
upgrades to its products. Some contend that Apple’s
quality of earnings is low. What does the term “quality of
earnings” mean?

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