How can earnings management affect the quality of ­earnings?

Q: What do the Retained earnings represent?

A: Financial Statement:   They are annual reports of an organization summarizing the financial…

Q: Compute earnings per share in a complex situation.

A: Earnings per share measures per share amount of earnings generated by a company. It is shown on the…

Q: How does retained earnings increase? What are the two ways that retained earnings decreases?

A: Retained earnings is a reserve kept aside from the surplus income earned to use it for re investment…

Q: What is earnings management?

A: Earnings refer to the amount earned by the business during the financial year. It may vary from year…

Q: 3. How do earnings management practices affect the quality of earnings?

A: Earnings quality:   The term earnings quality considers whether the earnings of the company are…

Q: porate earnings and profits (E&P) is correct?

A: E&P refers to the accumulated earnings and profits of a company. The E&P of a company…

Q: Differentiate between book value and market value. Explain why GAAPallows smoothing earnings…

A: The net value of a company's assets, as represented on its balance sheet, is roughly equal to the…

Q: Discuss the components of operating and nonoperating income and theirrelationship to earnings…

A: Meaning of Operating Income Operating Income is also known as Earnings before interest and taxes. It…

Q: What is retained earning

A: The retained earnings which is also known as ploughed back profit is expalined…

Q: Explain Characteristics of Retained Earnings.

A: Retained earning is the earned portion of capital. It is made up of accumulated earnings as reduced…

Q: illustrate the earnings management continuum

A: Answer:-  Earnings management meaning:- Earnings management is the practice of using accounting…

Q: What does this say about the company's profitability?

A: We are provided with three profitability ratios here - net profit margin ratio, ROA and ROE - and we…

Q: Why do changes in retained earnings occur?

A: Introduction: Retained earnings are nothing but the accumulated profits that the corporation keeps…

Q: How can we calculate earnings per share?

A: Earnings per share means amount of net profit earned per each share of common stock. Investor…

Q: How does retained earnings increase? What are the two ways that retained earnings decrease?

A: Retained earnings get increased if company generates net income.Retained earnings get decrease if…

Q: describe how ratio analysis and other techniques can be used to model and forecast earnings.

A: Ratio analysis is a quantitative method to evaluate the company’s financial strength by the…

Q: Why must a cost be assigned to retained earnings?

A: Likewise, debt and equity financing, retained earnings has also some cost. The predictor care about…

Q: what is profitability ratio?

A: Financial ratios provide information related to the company. There are various types of ratios like…

Q: What is E&P and how is it different than a company's net income?

A: Earnings and profits (E&P) are a company's ability to pay dividends to its shareholders. Many…

Q: What is the definition of “basic earnings per share”

A: Definition: Net income: The bottom line of an income statement which is the result of the excess of…

Q: explain how the idea of value creation under stakeholder theory differs from that under positive…

A: Here discuss about the details of the difference between the stakeholders theory with the positive…

Q: how do i calculate retained earnings

A: Retained earnings: Retained earnings are that portion of profits which are earned by a company but…

Q: standard setters?

A: Earnings management for contracting causes would be an interest in standard setters because of the…

Q: What is meant by earnings persistence?

A: Earning persistence is one of the attributes of accounting earnings. Basically, it means the…

Q: Discuss some financial variables that affect the price-earnings ratio?

A: The price-Earning Ratio refers to the ratio between earning per share and the current market price…

Q: Explain how earnings management from an informational perspective differs from the true income…

A: Earning management means to make the financial statements of the entity with the help of those…

Q: Identify conditions that would lead an analyst to expect that management might attempt to manage…

A: Earnings are the income or the gains which a company receives by working. There can be high earning…

Q: What are opportunity costs? Explain why opportunity costs are not recorded in financial accounting…

A: Opportunity cost is the value or benefit of the next best alternative given up when making a choice.…

Q: What are some of the pros and cons of using stockoptions to compensate managers?

A: Employee stock options: Stock options are the non-monetary incentives that are given to particular…

Q: How does earnings management affect earnings quality?

A: Earnings of a company is referred as net income or bottom line item of a company. It is a very…

Q: Why is earnings per share called “the bottom line”? What is EBIT, or operatingincome?

A: Earnings per share is the company’s net revenue/income that can be distributed among its…

Q: Explain what is meant by the term earnings quality.

A: The term earnings refer to the amount of money the company had earned during a particular period of…

Q: 2. How do earnings trends compare in terms of both the direction and stability of income?

A: Earnings are profits earned by the business which is very important for a business to survive.…

Q: 2. How do non-GAAP earnings relate to the concept of earnings quality?

A:

Q: What is the cost constraint, and how does it affect financial reporting?

A: Under financial accounting, constraints are referred to as boundaries or guidelines prescribed in…

Q: In what way are profitability and efficiency related? How are profitability and liquidity related

A: The question explains about profitability and efficiency related and profitability and liquidity…

Q: Do you use an income-statement strategy?

A: The income statement is one of three financial statements of an entity.(The others are the balance…

Q: Explain the types Earnings?

A: Earning is the amount of income that an individual or organization receives during a year.

Q: What is earnings management? Illustrate your answer with examples of Balance Sheet items that…

A: Financial reporting assists the intended users of financial statements, such as shareholders,…

Q: What are the impotance of Earning per Share and Diluted Earnings per Share in making economic…

A: Diluted EPS= Net Income−Preferred DividendsWASO+CDS​ where: EPS=Earnings per share WASO=Weighted…

Q: What is Ending retained earnings?

A: Retained earnings:   Retained earnings are the portion of earnings kept by the business for the…