When a Manager Keeps Expectations Higher Than His Subordinates' Best

question 46

Multiple Choice

When a manager keeps expectations higher than his subordinates' best performance and continually informs them that with a little more effort they can do it, what will the subordinates likely do?

• A) Increase their performance because the subordinates see these higher expectations as a challenge
• B) Probably burn out because although they try, they never reach the shifting expectations
• C) Help create a highly motivated staff
• D) Compete against other subordinates

Describe the principle of conservatism in accounting.

Understand the conditions under which companies can change accounting methods.

Comprehend the benefits and criticisms of fair value accounting.

Identify the origin and purpose of accounting standards codification.

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Definitions:

Outstanding Shares

The total shares of stock that are owned by shareholders, including restricted shares.

Rights Offering

A financial mechanism in which current shareholders are given the right to purchase additional shares of the company at a specified price before the shares are offered to the public.

Market Price

The present cost for purchasing or selling a good or service in a specific market.

Subscription Price

The set price at which existing shareholders can purchase additional shares of stock in a company, often during a rights offering.