A Wall Street Journal article noted that Apple reportedhigher income than its competitors by using a moreaggressive policy for recognizing revenue on futureupgrades to its products. Some contend that Apple’squality of earnings is low. What does the term “quality ofearnings” mean?

A Wall Street Journal article noted that Apple reportedhigher income than its competitors by using a moreaggressive policy for recognizing revenue on futureupgrades to its products. Some contend that Apple’squality of earnings is low. What does the term “quality ofearnings” mean?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A Wall Street Journal article noted that Apple reported
higher income than its competitors by using a more
aggressive policy for recognizing revenue on future
upgrades to its products. Some contend that Apple’s
quality of earnings is low. What does the term “quality of
earnings” mean?

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