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Author Question: A business buys office equipment for cash. What effect will this transaction have on the accounts? ... (Read 253 times)

lilldybug07

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on: Jul 6, 2018
A business buys office equipment for cash. What effect will this transaction have on the accounts?
 a. Debit an asset account and credit an expense account
  b. Debit an asset account and credit an asset account
  c. Debit an expense account and credit an asset account
  d. Debit a liability account and credit an asset account
  e. None of these

Question 2

Which of the following best defines the term earnings management?
 
  A) It is the intervention by the management in the internal financial reporting process, with the intent of boosting the earnings of an organization.
  B) It is the purposeful intervention in the external financial reporting process, with the intent of obtaining some private gain.
  C) It is the legitimate alteration of internal reports by the management to influence contractual outcomes that depend on reported accounting numbers.
  D) It is a systematic management of earnings of an organization by its external shareholders, with the intent of increasing future profits.


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billybob123

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Reply #1 on: Jul 6, 2018
Answer to Question 1

B

Answer to Question 2

B
Explanation: B) Earnings management, as defined by Schipper (1989), is the purposeful intervention in the external financial reporting process, with the intent of obtaining some private gain.


lilldybug07

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Reply #2 on: Jul 6, 2018
Thank you :)


billybob123

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Reply #3 on: Jul 6, 2018
Happy to help you


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