________ Is the Name Given to the Processes Surrounding Recognition

question 89

Multiple Choice

________ is the name given to the processes surrounding recognition of the principal-agent problem and ways to align agents with the interests of the principals.

• A)Principal theory
• B)Interested party theory
• C)Agency theory
• D)Compensation process theory

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Definitions:

Liquidation Value

The estimated amount that would be realized from the sale of a company's assets, after paying off its liabilities, if the company were to be liquidated.

Accrual

The accounting principle that income and expenses are recognized when they are earned or incurred, regardless of when the cash is actually received or paid.

Net Realisable Value

is the estimated selling price of goods in the ordinary course of business minus the estimated costs of completion and the necessary selling expenses, used in inventory valuation and impairment tests.

Depreciation

A method of allocating the cost of a tangible or physical asset over its useful life, recognizing the asset's wear and tear over time.