Which One of the Following Statements Is TRUE

question 4

Multiple Choice

Which one of the following statements is TRUE?

• A) One tool of corporate governance is the use of accounting control systems.
• B) An example of asset switching is an option to exchange one piece of real estate for another.
• C) One tool of corporate governance is the location of the company headquarters.
• D) An example of an agency relationship is when a supervisor hires a forklift operator.
• E) One tool of corporate governance is a company's tax avoidance strategy.

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Definitions:

Operating Activities

Activities that relate directly to the primary business operations of a company, such as selling goods and services.

Sale of Machinery

The transaction involving the disposal of machinery assets, either due to replacement, upgrading, or discontinuation of use, which can impact a company's financial statements.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, not including cash equivalents, as part of a company's financial operations.

Treasury Stock

Shares that have been issued by a company and then repurchased from the market, reducing the amount of outstanding stock on its balance sheet.