Sometimes Codes of Ethics Are Used to Force Members to Comply

question 37

Multiple Choice

Sometimes codes of ethics are used to force members to comply with organizational rules. This reflects which metaphor?

• A) code as rule book
• B) code as magnifying glass
• C) code as club
• D) code as shield

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Definitions:

Voting Stock

Shares that give the shareholder the right to vote on corporate matters, such as electing the board of directors.

Equity Method

An accounting method used to record investments in associate companies, where the investment is initially recorded at cost and adjusted according to the investor's share of the associate's net income or loss.

Equity Investment

Equity investment involves purchasing stocks or shares in a company, providing the investor with ownership interest and potentially dividends.

Cost Method

A method of accounting for equity investments representing less than 20% of the outstanding shares of the investee. The purchase is at original cost, and any gains or losses upon sale are recognized by the difference between the sale proceeds and the original cost.