The Bad Feelings Associated with Disappointing News Can Be Reduced

question 46

Multiple Choice

The bad feelings associated with disappointing news can be reduced if the receiver feels that the news was revealed sensitively, believes that the matter was treated seriously and fairly, and

• A)knows the reasons for the rejection clearly.
• B)learns of the bad news directly.
• C)understands the legal implications of the bad news.
• D)receives the bad news via certified mail.

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Definitions:

Liability

A financial obligation or debt that an individual or company owes to another entity, which must be settled over time.

Long-term Debt

Borrowings or financial obligations that are due to be repaid over a period longer than one year.

Pro Forma Financial Statements

Financial statements based on hypothetical scenarios or assumptions about the future of a business.

Spontaneously Generated Funds

Funds generated if a liability account increases spontaneously (automatically) as sales increase. An increase in a liability account is a source of funds; thus, funds have been generated. Two examples of spontaneous liability accounts are accounts payable and accrued wages. Note that notes payable, although a current liability account, is not a spontaneous source of funds since an increase in notes payable requires a specific action between the firm and a creditor.