According to Equity Theory

question 172

Multiple Choice

According to equity theory

• A)we choose people as comparison others only when we know that they receive fewer outcomes than we do.
• B)our comparison other never exists in real life.
• C)our comparison other is always someone in another organization.
• D)we compare ourselves with a comparison other only when we are certain that inequity exists.
• E)none of these statements are true.

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Definitions:

Rent Expense

The cost incurred by a business to utilize property or equipment for operations, which is recorded as an expense on the income statement.

Depreciation Expense

The portion of the cost of a fixed asset that is recorded as an expense each year of its useful life.

Working Capital

Current assets minus current liabilities, indicating the liquidity available to a business for day-to-day operations.

Closing Entry

An accounting transaction recorded at the end of an accounting period to transfer the balances of temporary accounts to permanent ones.