A Criticism of the Use of Productivity Measures Is That

question 10

True/False

A criticism of the use of productivity measures is that it may encourage short term results while ignoring long term ramifications.

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Definitions:

Permanent/Temporary

Classification of accounts where permanent accounts refer to items on the balance sheet and temporary accounts to items that pertain to the income statement.

Normal Balance

The side (debit or credit) of an accounting entry where increases to the account are recorded, depending on the type of account.

Financial Statement

Reports that summarize the financial performance, position, and cash flows of a business over a specified period.

Permanent/Temporary

Classification of accounts where permanent accounts are balance sheet items that carry over into the next fiscal year, and temporary accounts are income statement items that are closed at year-end.