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) Companies try to accelerate as much revenue as possible into early periods regardless of the effects on later periods
C) To smooth net income over time
D) To maximize compensation including bonuses

Question

Quizplus · Accepted Answer

Accelerating revenue into early periods regardless of the effects on later periods would actually be a motivation for managing earnings, so this cannot be the answer. The other three choices do represent motivations for managing earnings - meeting or beating earnings projections to boost stock value, smoothing net income over time, and maximizing compensation including bonuses.

Which of the Following Is NOT a Motivation to Manage