Positive Accounting Theory Suggests That the Separation of Ownership and Control

question 8

Multiple Choice

Positive accounting theory suggests that the separation of ownership and control within an entity means managers, as agents, are likely to act:

• A) in their own interests.
• B) in the interests of the debtholders.
• C) in the interests of the shareholders.
• D) in the interests of the directors.

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Definitions:

Economic Opportunities

Prospects for participation in economic activities that can lead to employment and financial success.

Cult of Domesticity

A 19th-century ideology in the United States and Britain that glorified women's roles in home-making and child-rearing, emphasizing piety, purity, domesticity, and submissiveness.

Economic Production

The process of creating goods and services through the combination of labor, land, and capital.

Private Domestic Realm

The sphere of family life and household management, traditionally considered separate from the public or political sphere.