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Which of the following methods are used by managers to manipulate earnings quality? (Select all that apply.) Check All That A
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Answer #1

Out of the given options with regards to manipulation of earnings quality by managers

first option doesn't affect the earnings quality as the cash flows from selling accounts receivable go to operating section of statement of cash flows which will not affect the quality as such.

second option can be taken as liberalisation of credit policies would change the earnings pattern for an organisation. More liberalisation of credit would lead to delayed payments where earnings could be manipulated.

third option also seems viable as he can manipulate by misappropriating the earnings and recording them as bad debts and later on he can pass an entry as bad debts recovered and get back the money into business. this affects the earning quality.

Fourth option can also affect the manipulation of earnings quality.

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