Which of the Following Is a Business Law Professor Most

question 54

Multiple Choice

Which of the following is a business law professor most likely to indicate as being the reason for the codifying of the standard of care of a corporation's directors and officers?

• A) The law required an objective standard to ensure fiduciaries strive for perfection.
• B) The unduly low common law standard of care compromised the duty of competence.
• C) Fiduciaries had to exhibit a greater degree of skill than could reasonably be expected.
• D) Fiduciaries were held to an unreasonably exacting duty of competence.

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Definitions:

Monetary Unit Assumption

An assumption that requires that only those things that can be expressed in money are included in the accounting records.

Asset Prepayments

Payments made in advance for goods or services, recorded as assets on the balance sheet until used or expired.

Time Period Assumption

An accounting principle that allows the business operations to be divided into specific time periods for reporting purposes, such as months or years.

Contra Asset Account

An account on the company's balance sheet that reduces the total amount of another account, typically used for accumulated depreciation.