The Term "Golden Parachute" Refers to

question 16

Multiple Choice

The term "golden parachute" refers to

• A) a clause requiring that huge dividend payments be made upon takeover.
• B) financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it.
• C) managers of a firm involved in a hostile takeover approaching a third party about making the acquisition.
• D) pay given to executives fired because of a takeover.

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Definitions:

Petty Cash

A small amount of cash on hand used for covering minor expenses in an organization.

Periodic Inventory Method

An accounting method where inventory is updated and the cost of goods sold (COGS) is calculated at the end of an accounting period, instead of recording inventory transactions as they happen.

Delivery Expense

Costs incurred in transporting goods from a seller to the purchaser, which may include shipping fees, fuel, and labor.

Normal Balance

The side (debit or credit) on which increases to the account are recorded, depending on the account type.