When a Company Chooses What Principle to Follow on Issues

question 136

True/False

When a company chooses what principle to follow on issues of ethics and social responsibility, there are two common philosophies to use as guides: first, let the free market and legal system decide, and second, let individual mangers and companies choose.

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Definitions:

Debits

Accounting entries that result in an increase in assets or expenses and a decrease in liabilities, equity, or income.

Credits

In accounting, credits are entries that decrease assets or increase liabilities and equity on a company's balance sheet.

Double-entry Bookkeeping System

A method of bookkeeping where every entry to an account requires a corresponding and opposite entry to a different account, ensuring the accounting equation is always in balance.

Fraud

A deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.