Long-Distance Providers Are Becoming Increasingly Concerned About Certain Activities Within

question 60

Multiple Choice

Long-distance providers are becoming increasingly concerned about certain activities within their industry.Various companies come together voluntarily to implement new standards of social responsibility that members must abide by.What seems to be the primary motivation in this case for an increased interest in social responsibility?

• A) Because corporations are creations of society, they are responsible for giving back to the communities in which they operate.
• B) These companies have realized it is in their best interest to increase their social responsibility before they are once again subject to stricter regulations.
• C) These companies are using social responsibility as a means to increase their profitability, both in the short term and long term.
• D) Long-distance providers have started taking pride in their industry and its record for social responsibility.
• E) They feel a responsibility to their stockholders, employees, the government, investors, and society as a whole.

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Definitions:

Adjusting Entry

Journal entries made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Overstatement

The act of presenting financial statements or data to be more significant than they actually are, often involving higher revenues, assets, or lower expenses than exist in reality.

Note Payable

A financial obligation represented by a written promissory note which the borrower agrees to pay back to the lender.

Interest Expense

The cost incurred by an entity for borrowed funds, typically reported on the income statement as a non-operating expense.