The Business Judgment Rule

question 14

Multiple Choice

The business judgment rule:

• A) permits directors to do their job.
• B) keeps judges out of corporate management.
• C) encourages directors to serve.
• D) accomplishes all of the above goals.

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Definitions:

Journal Entries

Are the record of all transactions a company makes, detailed by date, in the accounting system.

Secured Bond

Bond issued by a corporation that pledges specific assets as security to meet the terms of the bond agreement.

Debenture Bond

A type of debt instrument not secured by physical assets or collateral but based on the issuer's creditworthiness and reputation.

Sold at Discount

A sale transaction in which an item is sold for less than its regular or listed price.