Which One of the Following Statements Is TRUE

question 43

Multiple Choice

Which one of the following statements is TRUE?

• A) an example of an agency cost is when an outside investor is only willing to pay less for stockbecause she thinks the original owner will consume too many perquisites.
• B) an example of an agency cost is when the board of directors pays a dividend to shareholders.
• C) an example of an agency cost is when an attorney hires an expert witness for a trial.
• D) the commission required by the federal housing agency for a small business loan is an example ofan agency cost.
• E) an example of an agency cost is the salary of the agent hired to work for the principal.

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Definitions:

Bar Code Scanners

Electronic devices used to read and output printed barcodes to a computer, facilitating inventory management and sales operations.

Receiving Report

A document that records the details of goods received by a company, often used to verify shipments with purchase orders.

Materials Ledger

A detailed record keeping system that tracks the quantity and cost of materials on hand, received, and issued for production.

Service Organization

A business entity that primarily offers intangible products or services rather than physical goods.