A Potential Problem with Piece-Rate Plans Is That

question 156

Multiple Choice

A potential problem with piece-rate plans is that:

• A) workers will have a tendency to under-produce the good.
• B) workers have no incentive to work hard.
• C) workers may put little emphasis on the quality of the good.
• D) it is difficult for managers to enforce.

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Definitions:

Capital Accounts

Accounts used to record the financial contributions, withdrawals, and the share of profit or loss of owners in a partnership or in their personal accounts.

Unlimited Life

A concept in accounting that assumes a company will continue to operate indefinitely, allowing for the deferral of certain expenses over a long period.

Income Summary

A temporary account used in closing revenue and expense accounts.

Closing Entry

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts.