Alternative accounting methods affect the quality of earnings.

Question

Quizplus · Accepted Answer

Alternative accounting methods can affect the way a company reports its financial results, which can impact the quality of earnings. For example, using aggressive accounting methods may artificially inflate earnings, while conservative methods may result in lower reported earnings. This can make it difficult for investors to accurately assess a company's financial performance and can lead to incorrect investment decisions.

Alternative Accounting Methods Affect the Quality of Earnings