The Manager Preparing the Financial Statements Receives a Bonus Based

question 66

Multiple Choice

The manager preparing the financial statements receives a bonus based on net income.Which of the following accounting decisions could he use to increase his bonus?

• A)Not recognize revenue until all the cash is collected.
• B)Pick a longer life for the depreciation of fixed assets.
• C)Pay out the maximum amount of dividends possible.
• D)Delay the payment of expenses as long as possible.

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Definitions:

Planning Fallacy

The tendency to underestimate the time, costs, and risks of future actions while overestimating the benefits, leading to poor planning and outcomes.

"All-Nighters"

Extended work or study sessions that last throughout the night, often used to meet deadlines or prepare for exams.

Term Paper

An academic assignment or research paper that is usually due at the end of a term or semester.

Prospect Theory

An economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are uncertain.