Which of the Following Statements Is Correct with Respect to Positive

question 43

Multiple Choice

Which of the following statements is correct with respect to positive accounting theory?

• A) Managers of firms with bonus-based contracts prefer LIFO method of valuation basis, if permitted.
• B) Managers of firms with bonus-based contracts prefer FIFO method of valuation basis.
• C) Managers prefer the FIFO method of valuation basis.
• D) Managers with debt covenants prefer LIFO method, if permitted.

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Definitions:

Approving Nods

Gestures made by moving the head up and down to express approval, agreement, or acknowledgment without using words.

Open Up

To become more accessible or available emotionally or physically, creating an environment for sharing information or entering.

Deficit Need

A requirement essential for a person's psychological development and growth, which, if unmet, can lead to feelings of inferiority or weakness.

Self-Actualization

The realization or fulfillment of one's talents and potentialities, considered as a drive or need present in everyone.