Which of the Following Is a Reason Why Accounting,and Accountants,can

question 17

Multiple Choice

Which of the following is a reason why accounting,and accountants,can be considered very powerful?

• A) The emphasis on profitability measures provides support to profitable companies which may not be worthy of support under other measures.
• B) The provision of purported objective information provides users with a source of power to drive changes to a corporation's behaviour.
• C) The output of the accounting process impacts on many decisions which can result in transfers of funds, and therefore wealth.
• D) All of the given options are correct.

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Definitions:

Collateral

Assets pledged by a borrower to secure a loan or other credit, and subject to seizure on default.

Precautionary Demand

The desire to hold cash or assets as a buffer against future financial uncertainties.

Emergency Needs

Financial requirements that arise unexpectedly and require immediate attention, often relating to health, home repairs, or urgent personal matters.

Chattel Mortgage

A loan arrangement in which personal movable property is used as security for the loan, and the lender holds a mortgage over the chattel.