Which of the Following Observations Is True About the Equity

question 17

Multiple Choice

Which of the following observations is true about the equity theory?

• A)It suggests that managers compare the performance of employees with their potential to improve.
• B)It suggests that employees' performance should be evaluated based on their developmental needs.
• C)It suggests that internal equity pay comparisons focus on what employees in other organizations are paid for doing the same general job.
• D)It suggests that when a person's outcome-input ratio is greater than the comparison other's ratio,underreward inequity is perceived.
• E)It suggests that people evaluate the fairness of their situations by comparing them with those of other people.

---

Definitions:

Real Accounts

Accounts related to assets, liabilities, and equity that are not closed at the end of the accounting period, as opposed to nominal accounts.

Accumulated

The total amount collected or gathered over a period, often referring to earnings, benefits, or other financial measures.

Closing Entries

Closing entries are journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts.

Capital Account

An account on a national or international level showing the net change in asset ownership for a country, or on a company level, it represents the funds contributed by owners plus retained earnings.