The Bottom-Line Earnings Figure from the Accounting System Is Misleading

Multiple Choice

The bottom-line earnings figure from the accounting system is misleading because _____.

A) it does not reflect actual cash inflows and outflows of the firm
B) stock dividends are difficult to forecast
C) depreciation is a cash outlay but is not reflected as such
D) tax laws change regularly which cause the firm to misjudge its true tax obligation