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Posted: December 16th, 2022
Sellograph Corporation reports sales of $10M for Year 2, with a gross profit margin of 40%. 20% of Sellograph’s sales are on credit.
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38. Which of the following is not a factor in producing earnings forecasts?
A) Estimating the level of earnings
B) Separation of recurring and nonrecurring components
C) Recognizing potential earnings management
D) Recognizing potential income smoothing
40. Which of the following is not a typical form of earnings management?
A) Changing accounting estimates
B) Offsetting one-time gains and losses
C) Changing accounting principles
D) Changing auditors
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