Which of the following can affect earnings quality?

I. Management's choice of accounting principle
II. Management's choice of dividend policy
III. Management's estimates
IV. Management's discretionary expenditures

A)I, II, III, and IV
B)I, II, and III
C)I, III, and IV
D)I and III

Question

Which of the following can affect earnings quality?

I. Management's choice of accounting principle
II. Management's choice of dividend policy
III. Management's estimates
IV. Management's discretionary expenditures

A)I, II, III, and IV
B)I, II, and III
C)I, III, and IV
D)I and III

Quizplus · Accepted Answer

Earnings quality can be affected by management's choice of accounting principles, estimates, and discretionary expenditures. Dividend policy affects the distribution of earnings rather than the quality of the earnings themselves.

Which of the Following Can Affect Earnings Quality