The corporate disclosure practice will help all the stakeholders to understand and measure business operation.
The corporate disclosure practice will help all the stakeholders to understand and measure business operation.
Chapter3: Analyzing And Recording Transactions
Section: Chapter Questions
Problem 10MC: Which of the following is the principle that a business must report any business activities that...
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Question
The corporate disclosure practice will help all the stakeholders to understand and measure business
operation. Annual financial statement and particularly income statement is one of the most important ones.
However, a company's reported profits will be impacted by different factors, including when particular
transactions and events are recognized and how such transactions and events are measured.
Requirement:
1) Using earning management concept, discuss why the timing of recognizing events that impact
income, revenue or profit, or expenses are important for managers?
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