EARNINGS MANAGEMENT Definition

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EARNINGS MANAGEMENT occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company, or to influence contractual outcomes that depend on reported accounting numbers.

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ACID-TEST RATIO is an analysis method used to measure the liquidity of a business by dividing total liquid assets by current liabilities.

OWN WORK CAPITALIZED represents the value of work performed for own purposes and capitalized as part of fixed assets.

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