earnings quality

Maneesh 02 May 2020 at 12:55 PM

Which statements describe indicators of earnings quality?

I. Consistency in reporting policies is an indication of earnings quality.

II. A company with stable earnings levels is an indication of earnings quality.

III. More conservative accounting policies are an indicator of earnings quality.

IV. A company with widely varying earnings levels from year to year is an indication of earnings quality.

A) I, III, and IV, only.

B) I and II, only.

C) II, III and IV, only.

D) I, II and III, only.

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FACULTY 13 May 2020 at 01:51 PM

I, II and III, only. (option D)

I. Consistency in reporting policies is an indication of earnings quality.

A company with stable earnings levels is an indication of earnings quality.

More conservative accounting policies are an indicator of earnings quality.

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