Quality of earnings is considered higher if management depreciates its long-term assets over a longer period than the industry average.

Question

Quizplus · Accepted Answer

Quality of earnings is not necessarily higher if management depreciates its assets over a longer period than the industry average. In fact, this may be an indication of aggressive accounting practices and could result in overstated assets and net income.

Quality of Earnings Is Considered Higher If Management Depreciates Its