Which of the Following Is the Best Measure to Ensure

question 18

Multiple Choice

Which of the following is the best measure to ensure that management decisions are in the best interest of the stockholders?

• A) fire managers who are inefficient
• B) remove management's perquisites
• C) tie management compensation to the performance of the company's common stock price
• D) tie management compensation to the level of dividend per share

---

Definitions:

Salary Expense

An expense account that records the total amount of salary payments made to employees over a period of time.

Accrued Salaries

Salaries that have been incurred but not yet paid, representing a liability for the company.

Closing Entries

Entries recorded at the close of an accounting period to move balances from temporary to permanent accounts.

Adjusted Trial Balance

A list of all accounts and their balances after adjusting entries are made, used to prepare financial statements and ensure the ledger accounts are balanced.