JWB1955
Nov 3, 2008, 04:44 PM
The new management of XYZ Inc. has increased the amount of their year-end liability-expense accruals by over 35% compared to recent years, primarily in recording estimated future warranty expenses. The most likely reason for this action is
A) to increase net income this year to make the new management look good.
B) to make net income higher in future periods.
C) to maximize their bonus (based on stock price appreciation) for the current year.
D) to reduce net income which will reduce federal income taxes payable and improve cash flows.
A) to increase net income this year to make the new management look good.
B) to make net income higher in future periods.
C) to maximize their bonus (based on stock price appreciation) for the current year.
D) to reduce net income which will reduce federal income taxes payable and improve cash flows.