An Example of a Factor That Provides the Incentive for Management

question 108

Multiple Choice

An example of a factor that provides the incentive for management to misstate revenue cycle assertions would be ________.

• A)realistic sales targets within the firm
• B)strong support from top management of an ethical culture
• C)pressures to overstate revenues to achieve revenue or profitability targets that were not achieved
• D)pressures to accurately report revenues to achieve revenue or profitability targets that were achieved

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Definitions:

Average-Total-Cost Curve

A graphical representation showing the relationship between the average total cost of producing a good and the quantity of the good produced.

Diminishing Marginal Product

A principle stating that, holding all else constant, an increase in the quantity of one input will eventually lead to lower additional output per unit of input.

Marginal Product

The extra production that comes from using an additional unit of input, while keeping other inputs unchanged.

Total Cost Curve

A graphical representation of the total cost of production, which shows how total cost changes as the quantity of output changes.