Mark-To-Market Accounting Is Incorrectly Characterized as

question 17

Multiple Choice

Mark-to-market accounting is incorrectly characterized as

• A) relevant for management compensation purposes.
• B) relevant for valuation purposes.
• C) relevant to investors.
• D) sometimes misleading.
• E) responsible for the subprime lending fiasco.

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Definitions:

Agent

A person authorized to act on behalf of another, known as the principal, in business transactions or legal matters.

Principal

The main party to a transaction or contract who has authorized another party (agent) to act on their behalf.

Duty Of Obedience

The requirement for directors, officers, and agents of a corporation to act within the scope of their authority and in the best interest of the corporation.

Unauthorized Contract

A contract made by a person who lacks the authority to do so, potentially making it unenforceable against the presumed principal.