​Which of the Following Is True

question 66

Multiple Choice

​Which of the following is true?

• A)​Incentive compensation imposes no risks on the agents and thus should not affect their compensation
• B)Incentive compensation imposes risk on the agent but need not be compensated for
• C)Incentive compensation imposes risk on the agent for which they should be compensated
• D)​Incentive compensation is a bad idea

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Definitions:

Costing System

A method used by organizations to allocate production costs to products or services, aiding in financial analysis and pricing decisions.

Merchandising Entity

A business that purchases finished products and sells them to customers, typically involving retail and wholesale entities.

Value Chain

A series of activities that businesses go through to deliver a valuable product or service to the market.

Management Accounting

The process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short-term decisions.