High earnings quality is most likely to:
A)result in steady earnings growth.
B)improve the ability to predict future earnings.
C)be based on conservative accounting choices.
D)result in fewer bad debts.

Question

Quizplus · Accepted Answer

High earnings quality means that the reported earnings are a reliable and accurate representation of the company's financial performance. This, in turn, improves the ability of investors and analysts to predict future earnings. It does not necessarily result in steady earnings growth, and conservative accounting choices may or may not be a factor in achieving high earnings quality. The presence of bad debts may also not necessarily impact earnings quality.

High Earnings Quality Is Most Likely To