Accounting Numbers Are Useful in That They

question 75

Multiple Choice

Accounting numbers are useful in that they

• A)are easy to manipulate by management and help predict a company's future earnings and cash flows.
• B)allow users to see management's predictions of future profits and help predict a company's future cash flows.
• C)help investors and creditors influence and monitor management's business decisions and help predict a company's future earnings and cash flows.
• D)help investors and creditors influence, manipulate, and monitor management's business decisions so that future profits are high.

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Definitions:

Cognitive Dissonance

The mental discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time, leading to psychological tension and behavior change.

Elaboration Likelihood

A theory in social psychology that suggests there are two routes to attitude change: the central route, which involves careful thought, and the peripheral route, which relies on superficial cues.

Self-Perception Theory

A psychological theory suggesting that people develop their attitudes and opinions by observing their own behavior and concluding what attitudes must have caused them.

Group Size

Refers to the number of individuals within a group, affecting dynamics and interactions within.