Which of the following is NOT a motivation to manage earnings?
A) Companies try to meet or beat Wall Street earnings projections in order to grow market capitalization and increase the value of stock options
B) Avoid the consequences of violating debt covenants
C) To smooth net income over time
D) To maximize employee bonuses

Question

Quizplus · Accepted Answer

Managing earnings to maximize employee bonuses is a motivation to manage earnings, so option D is not the correct answer. A, B, and C are common motivations for companies to manage earnings.

Which of the Following Is NOT a Motivation to Manage