Question: 1. There has been a trend toward rigid uniformity in me format of the income statement. Explain how and why this has occurred.
2. Why might the distinction between revenues and gains, and between expenses and losses, be important to report yet unimportant as to how they are reported?
3. Research, while inconclusive, has shown that earnings are manipulated downward prior to a management buyout. What is the logic of this and why do management buyouts present a difficult agency theory problem?