Normally,the Principal-Agent Problem

question 90

Multiple Choice

Normally,the principal-agent problem

• A) occurs in publicly traded companies.
• B) occurs in privately held companies.
• C) occurs in sole proprietorships.
• D) is equally severe in all of the above examples.

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Definitions:

Revenue Account

An account that records the income earned by a company from its business activities.

Debit

A bookkeeping record that raises the value of an asset or expense, or reduces the value of a liability or equity.

Expense Account

An account used to record expenditures incurred by a company, relating to its operational activities.

Supplies

Items used in the day-to-day operations of a business, typically consumable in nature, such as office supplies, cleaning materials, and manufacturing components.