Which of the Following Statements Is True

question 44

Multiple Choice

Which of the following statements is true?

• A)Incredibly, nepotism tends to be in shareholders' best interest.
• B)If a firm is enjoying a period of profitability and its profits is are being expropriated by its employees, management's best course of action may be to sell off the firm's assets and
• Return the funds to its investors.
• C)The management of dying companies should focus on selling off the firm's assets and returning the funds to its investors; the management of healthy companies should focus on
• Growing bigger.
• D)Managers who wish to increase shareholder wealth will seek to grow, or at least prevent shrinking, their firm's business.

---

Definitions:

Cash Payments Journal

A business ledger that documents every payment or cash disbursement made by a company.

General Journal

An accounting journal where all types of transactions are initially recorded, before being posted to specific accounts in the ledger.

Accounting System

A systematic process used by entities to track financial transactions and summarize financial data.

Cost Effectiveness

An assessment that compares the relative costs and outcomes (effects) of different courses of action.