Elizabeth Has Been Given the Task of Making the Production

question 46

Multiple Choice

Elizabeth has been given the task of making the production process more efficient.Her manager has failed to set any goals and Elizabeth is unaware of his requirements.Additionally,she has insufficient information on the process and how to improve it.This has forced her to rely on intuition and take inspiration from past experiences to implement her decision.Which of the following decision-making methods does this exemplify?

• A)The subjective method
• B)The rational choice method
• C)The political method
• D)The incremental trial-and-error method

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Definitions:

Material Error

A significant mistake in financial reporting that could influence the economic decisions of users of the financial statements.

Prospective Adjustment

An accounting adjustment applied to transactions or valuation changes that occur in the current or future accounting periods.

Adjusting Events

Events after the balance sheet date that provide further evidence of conditions that existed at the end of the reporting period, requiring adjustments to financial statements.