Traditional Financial Accounting Calculations of Profit Ignore the Cost of Externalities.One

question 49

Multiple Choice

Traditional financial accounting calculations of profit ignore the cost of externalities.One reason for this is:

• A) Negative impacts on environmental resources not controlled by an entity (e.g. air and oceans) are not considered impacts on assets of the entity.
• B) Negative impacts on environmental resources not controlled by an entity do not fall into the definition of extraordinary items.
• C) Negative impacts on environmental resources not controlled by an entity may cover more than one future accounting period.
• D) Negative impacts on environmental resources not controlled by an entity are by-products of ordinary activities and are not therefore disclosed in the statement of comprehensive income.

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Definitions:

Managing by Objectives

A management strategy in which employees and managers collaborate to set, monitor, and achieve specific objectives.

Transformational Leadership

A style of leadership where a leader works with teams to identify needed change, creating a vision to guide the change through inspiration, and executing the change in tandem with committed members of the group.

Experience of Flow

A state of complete immersion and focus in an activity, often leading to a sense of enjoyment and fulfillment.

Employee Engagement

The level of an employee's emotional investment and commitment to their organization, influencing their willingness to contribute to the company's success.