When organizations "manage" earnings, they "time" income and expenses to enhance current financial performance.

Question

Quizplus · Accepted Answer

Managing earnings involves manipulating the timing of income and expenses to improve the current financial performance of an organization. This can include deferring expenses to future periods or accelerating income recognition to the current period. It is a controversial practice as it can mislead investors and stakeholders about the true financial health of the organization.

When Organizations "Manage" Earnings, They "Time" Income and Expenses to Enhance