The First Step in Making a Good and Ethical Business

question 109

Multiple Choice

The first step in making a good and ethical business decision is which of the following?

• A) Learn to recognize unethical business activities when they occur.
• B) Develop a business code of ethics.
• C) Hire an ethics consultant.
• D) Develop a personal code of ethics.

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Definitions:

Depreciation

An accounting method of allocating the cost of a tangible asset over its useful life.

Interest Expense

The cost incurred by an entity for borrowed funds; interest expense is often deductible for the borrower for tax purposes.

Inflation

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

Stockholders' Equity/Total Assets

A ratio expressing the proportion of a company's assets that are financed by shareholders' equity.