Which of the Following Is True of Rewarding Managers on the Basis

question 55

Multiple Choice

Which of the following is true of rewarding managers on the basis of residual income?

• A) Managers are paid a fixed amount for his services regardless of the risk involved.
• B) Managers' efforts are easily measured.
• C) Managers taking less risk should be rewarded more since more risk can lead to huge losses.
• D) Managers' rewards are dependent on their own efforts and other local economic factors.

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Definitions:

Account Payable

Liabilities or amounts owed by a business to its creditors or suppliers for goods and services received but not yet paid for.

Liabilities

Financial obligations or debts that a company owes to others, which are due to be paid in the future.

Total Assets

The sum of all assets owned by a company, including both current and non-current assets, representing the total resources the company has at its disposal.

Stockholders' Equity

Refers to the residual interest in the assets of a corporation after deducting its liabilities.