Profits Are Down So the Controller Decides to Change the Corporation's

question 132

Multiple Choice

Profits are down so the controller decides to change the corporation's accounting policy relating to inventory costing.The change will allow the corporation to report higher income and higher assets,although the physical inventory has not changed.Which of the following statements is MOST correct?

• A) The stock price is likely to increase because income is higher.
• B) The stock price is likely to be unaffected because the stock market is efficient.
• C) The stock price is likely to decrease because reported inventory is higher.
• D) If the stock price increases, the stock market is efficient.

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Definitions:

Enculturation

The process by which an individual learns the values, norms, customs, and social practices of their culture through socialization.

Subcultures

Cultural groups within a larger culture, often with beliefs or interests at variance with those of the larger culture.

Symbols

Objects, signs, or emblems that represent or stand for something else, often communicating complex ideas, concepts, or values.

Ethnic Group

A community of people who share a common cultural background, ancestry, language, history, and often, geographic origin.