Companies that make honest,but optimistic,adjusting entries that lead to a higher net income are said to:
A)report "higher quality" earnings.
B)report "lower quality" earnings.
C)have "defensive" management.
D)have "regressive" management.

Question

Quizplus · Accepted Answer

Adjusting entries that lead to a higher net income through optimistic estimations can result in "lower quality" earnings because they may not accurately reflect the company's financial reality, potentially misleading stakeholders about its performance.

Companies That Make Honest,but Optimistic,adjusting Entries That Lead to a Higher