How Might Self-Serving Bias Be Observed in a Corporate Annual

question 6

Multiple Choice

How might self-serving bias be observed in a corporate annual report?

• A)The report would say more about the company's problems and less about its successes.
• B)The report would emphasize the role of competition,inflationary pressures,and other external causes of problems in the organization's performance.
• C)The report would exclude any bad news about the organization's performance.
• D)The report would acknowledge that competition,the economy and other external factors should be credited for some of the company's recent success.
• E)The report would acknowledge some of management's mistakes,but suggest that management in other companies have been making the same mistakes.

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Definitions:

Adjusted Trial Balance

A report that lists all the accounts and their balances after adjustments, used to ensure the total debits equal total credits before generating financial statements.

Closing Entries

Transactions noted at the end of an accounting cycle for the purpose of transferring balances from temporary accounts to their permanent counterparts.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thereby resetting the temporary accounts for the next period.

Post-Closing Trial Balance

A listing of all balance sheet accounts with balances after closing entries are made, used to verify the equality of debits and credits.