One Problem with Equity Theory Is That It Incorrectly Assumes

question 25

True/False

One problem with equity theory is that it incorrectly assumes people are individualistic, rational, and selfish.

---

Definitions:

Consolidation

The process of combining the financial statements of separate but related entities to present as those of a single economic entity.

NCI

Non-Controlling Interest, a minority shareholding in a subsidiary not owned by the parent company, reflecting those shareholders' claim on assets and earnings.

Disclosure

The provision of financial and other significant information about a company to its stakeholders, typically through financial statements and notes, to facilitate informed decision-making.

Subsidiary

A company that is controlled by another company, typically referred to as the parent company.