Financial Accounting, Binder Ready Version: Tools for Business Decision Making
Financial Accounting, Binder Ready Version: Tools for Business Decision Making
8th Edition
ISBN: 9781118953907
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
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Chapter 13, Problem 5Q
To determine

Quality of Earnings:

Companies face artificial profits such as inflation of inventory created by accounting anomalies. Quality of earnings refers to the earnings of a company which refer to lower costs or higher sales and not the aforesaid profits. When an industry faces high inflation, the quality of earnings become very low.

To identify and explain: The factors that affect quality of earnings.

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