91. Which of the following actions by a manager could be undertaken with the objective of ensuring that the company continues to meet its debt-to-equity debt covenant? A. An increase in the allowance...

91. Which of the following actions by a manager could be undertaken with the objective of ensuring that the company continues to meet its debt-to-equity debt covenant?

A. An increase in the allowance for doubtful accounts.
B. The recording of deposits received in advance as revenue.
C. The accrual of warranty liabilities at the time of sale.
D. The classification of the current portion of a long-term liability as a current liability.

92. All of the following are examples of accounting policies that can be used to manage earnings, except:

A. inventory valuation.
B. amortization method.
C. lease capitalization.
D. warranty provision.

93. During the past year, a company had some land expropriated by the local government when the city was widening a road. Management included the gain in operating income as an offset to losses incurred on the sale of some other assets, as they decided that both events were related to fixed assets. This decision by management could be interpreted as earnings management for which of the following reasons?

A. It violates the principles of revenue recognition.
B. It involves management manipulation regarding the timing of the write-down of an asset.
C. It is an example of a big bath.
D. It does not disclose the information on the income statement as per the accounting principles and standards.

94. A) What kind of information would you expect to find in the Management Discussion and Analysis (MD&A)?
B) Who should read the MD&A?
C) What is the intent of the MD&A?
D) What types of companies prepare a MD&A?
E) How reliable is the information in the MD&A?