User Account

All Pages

Discuss several methods business managers might use

Assignment Help Accounting Basics
Reference no: EM132020739

Question - One reason accounting earnings might not be a realistic measure of economic income is the incentive and ability of business managers to manipulate reported profits for their own benefit. This may be particularly true when their company has an incentive compensation plan that is linked to reported net income. The manipulation of earnings, known as earnings management, commonly involves income smoothing. Income smoothing has been defined as the dampening of fluctuations about some level of earnings that is considered normal for the company. Research has indicated that income smoothing occurs because business managers prefer a stable rather than a volatile earnings trend.

Why do business managers prefer stable earnings trends?

Discuss several methods business managers might use to smooth earnings.

Reference no: EM132020739

Questions Cloud

Analyze competing entities including disenfranchised groups : Draft a transition to move the reader from your Diversity and Ethics section to your final section.
Which magma is most likely to quench to a natural glass : 1. Which magma is most likely to quench (congeal) to a natural glass?
What would be the weight used for equity : The bonds are selling for 99.95 percent of par, what would be the weight used for equity in the computation of Tom and Jerry's WACC
What the expected total costs and expected costs per unit : Assume the same facts as in part a, except the company expects 19,000 sales in 2015. What are the expected total costs and expected costs per unit for 2015
Discuss several methods business managers might use : Why do business managers prefer stable earnings trends? Discuss several methods business managers might use to smooth earnings
How does the selected organization promote human flourishing : Our work within the world matters to God and our neighbors, and that we honor God by serving others in ways that promote human flourishing.
What the shop returns and allowances and cost of goods sold : The Happy Auto Shop has the following annual information: What are the shop's returns and allowances and cost of goods sold
Review the given classmates responses : After you have submitted your initial post, take time to review your classmates' responses and to respond specifically and substantially to at least two.
Company using the fama-french three-factor model : An analyst has modeled the stock of a company using the Fama-French three-factor model.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd