QUESTIONS 45 THROUGH 68 RELATE TO FINANCIAL STATEMENT ANALYSIS

68. An analyst has made three observations in his worksheets about a company that he is reviewing. Which of the observations most likely reduces the quality of earnings of the company? The company: A. reported for the first time an asset titled “Deferred customer acquisition costs.” B. has reduced its estimate of the expected useful life of computer equipment from 8 years to 5 years. C. entered into long-term leases for its manufacturing equipment instead of purchasing it and recorded the leases as capital leases.