In the Context of New Perspectives on Equity Theory, Which

question 58

Multiple Choice

In the context of new perspectives on equity theory, which of the following statements is true of benevolents?

• A)These people may be thought of as takers.
• B)These people may be thought of as givers.
• C)They are comfortable only with an equity ratio greater than that of their comparison other.
• D)They prefer equity based on the originally formed theory.

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Definitions:

Write Off

The accounting action of declaring that an asset is no longer useful and recording its depreciation in the financial statements.

Expense Recognition Principle

An accounting principle that matches expenses with the revenues they helped to generate, recognizing expenses in the same period as the revenues.

Direct Write-off Method

An accounting method where uncollectible accounts receivable are directly removed from the accounts when deemed irrecoverable.

Materiality Constraint

An accounting principle that allows the omission or misstatement of figures that are not significant enough to influence the decision-making process of users of financial statements.