The Shareholder Model Holds That Management's Most Important Responsibility Is

question 5

True/False

The shareholder model holds that management's most important responsibility is long-term survival (not just maximizing profits),which is achieved by satisfying the interests of multiple corporate stakeholders (not just shareholders).

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Definitions:

Indirect Method

A method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past cash receipts and payments and all accruals of expected future cash receipts and payments.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Direct Method

The Direct Method in accounting refers to a way of reporting cash flows from operating activities by directly listing major classes of gross cash receipts and payments.

Operating Activities

The primary revenue-generating activities of a business which include production, sales, and delivery of the company’s main goods and services.