A firm wants to receive cash earnings. Management's viewpoint is that cash earnings are ____.

Question

Quizplus · Accepted Answer

Cash earnings refer to earnings that are generated from actual cash inflows, rather than accounting adjustments. Management typically prefers cash earnings as they are considered to be high quality and more reliable indicators of a company's financial performance. Stock dividends, retained earnings, and debt retirement are not necessarily synonymous with cash earnings.

A Firm Wants to Receive Cash Earnings