Earnings Management: Definition, Techniques & Examples


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question 1 of 3

Which statement best describes earnings management?

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1. How is the acronym WISE used to describe the reasons behind earnings management?


Jane owns a chain of flower shops, but due to bad business, she had to close down two of her shops. Jane knows that this loss has already caused a decrease in net earnings. She decides to charge a majority of the companies expenses to the shut down of the two shops.

Identify the earnings management technique that Jane has decided to use.

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About This Quiz & Worksheet

The majority of the questions on the quiz are fill in the blank. They will require you to choose the correct term from the provided choices. The questions will test you on definitions related to earnings management.

Quiz & Worksheet Goals

The quiz aims to solidify your awareness of the following:

  • Earnings management that happens when managers plan events to happen at certain times
  • Earnings management technique that happens when expenses are based on estimates
  • Acronym that is used to describe the reasons for earnings management

Skills Practiced

The skill will help you practice the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related earnings management lesson
  • Defining key concepts - ensure that you can accurately define various acronyms
  • Distinguishing differences - compare and contrast topics from the lesson, such as different earnings management techniques

Additional Learning

After you complete your interesting quiz, you may want to further deepen your understanding of the subject. Make sure then to go through our corresponding lesson Earnings Management: Definition, Techniques & Examples. The lesson helps you:

  • Define key concepts such as earning management
  • Examine the meaning and importance of common earnings management acronyms
  • Recognize the various aspects of the WISE acronym