The practice of carefully timing the recognition of revenues and expenses to even out the amount of reported earnings from one year to the next is called
A) revenue recognition.
B) income smoothing.
C) restructuring.
D) accrual-basis accounting.

Question

Quizplus · Accepted Answer

The practice of carefully timing the recognition of revenues and expenses to even out the amount of reported earnings from one year to the next is called income smoothing. It is a strategy used by companies to make their financial performance appear more consistent and stable over time. This is often done to avoid negative reactions from investors or lenders due to fluctuations in earnings.

The Practice of Carefully Timing the Recognition of Revenues and Expenses