Question #25
Reading: Reading 23 Residual Income Valuation
PDF File: Reading 23 Residual Income Valuation.pdf
Page: 12
Status: Correct
Correct Answer: A
Question
In general, firms making aggressive accounting decisions will report book values that are:
Answer Choices:
A. lower
B. higher
C. consistent with fair market value
Explanation
In general, firms making aggressive (conservative) accounting decisions will report higher
(lower) book values and lower (higher) future earnings.