Which of the Following Statements Regarding the Relationship Between Formal

question 49

Multiple Choice

Which of the following statements regarding the relationship between formal and informal rules is accurate?

• A)Informal rules replace formal rules in situations where enforcement is not possible.
• B)Informal rules fill the spaces between formal rules by allowing for exceptions in social behavior that are generally agreed upon.
• C)Informal rules allow new organizations to maintain some semblance of order before organizational bylaws have been drafted.
• D)Informal rules dictate our behavior in legal situations.

---

Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but retained by the company for reinvestment.

Total Assets

The sum of all currently owned resources that have value which can be converted into cash and are used in operating the company.

Liabilities

Financial obligations or debts a company owes to others, expected to be settled over time through the transfer of assets, provision of services, or other economic benefits.

Statement of Stockholders' Equity

Financial documentation that shows changes in the value of a company's equity over a reporting period.