If an Incentive Contract Specifies Certain Accounting Performance

question 42

Multiple Choice

If an incentive contract specifies certain accounting performance

• A)that accounting number will likely be the focus of managers.
• B)managers will set aside the accounting goal if it conflicts with the goal of maximizing shareholder wealth.
• C)managers will be unable to manipulate the GAAP, so shareholders can be confident of having their wealth maximized.

Understand the concept and characteristics of histograms.

Recognize and describe the shapes of distributions as symmetric, positively skewed, or negatively skewed.

Understand the application and calculation of frequency distributions and relative frequencies.

Understand how the number of observations affects the construction of histograms and frequency distributions.

---

Definitions:

Alarm Phase

The initial reaction of the body to stress, activating the sympathetic nervous system and the release of stress hormones.

North American Men

Refers to adult males living in or originating from North America, encompassing a wide range of cultural, ethnic, and social backgrounds.

Emotion

A complex psychological state that involves a subjective experience, physiological response, and behavioral or expressive response.

Hans Selye

A pioneering Hungarian-Canadian endocrinologist who is known for his research on the stress response and for introducing the concept of stress in medical research.