Earnings management focuses on managing when revenues and expenses are recorded in order to favorably reflect a company's financial performance in a(n)________.
A)illegal manner
B)legal manner
C)questionable manner
D)vague manner

Question

Quizplus · Accepted Answer

Earnings management is a legal practice where companies manipulate their financial reporting to present a better financial performance. However, the manipulation should be in compliance with accounting principles and laws. Therefore, the best choice for the blank is a legal manner.

Earnings Management Focuses on Managing When Revenues and Expenses Are