If management is manipulating earnings to achieve performance targets, what outcome may result?
A)Net income may exceed cash from operations.
B)Cash from investing activities will exceed cash from financing activities.
C)Cash will experience a net decrease.
D)Total assets will increase.

Question

Quizplus · Accepted Answer

Manipulating earnings to achieve performance targets can result in net income exceeding cash from operations. This is because management may be using accounting tricks or financial engineering to boost earnings without actually generating cash inflows. Ultimately, this can lead to a shortfall of cash and negatively impact the financial health of the company in the long run.

If Management Is Manipulating Earnings to Achieve Performance Targets, What