Which of the Following Statements Apply to Political Cost Hypothesis

question 19

Multiple Choice

Which of the following statements apply to political cost hypothesis?

• A) Political costs arise as a result of an entity's relationships with shareholders and lenders.
• B) Managers would prefer accounting policies that increase profit in order to compensate for political costs.
• C) Smaller entities are more likely to be the target of lobby groups.
• D) Managers of larger entities are more likely to choose accounting policies that reduce profit in order to avoid political costs.

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Definitions:

Department of Justice

The federal executive department responsible for enforcing law and administering justice within the United States.

Murdered

The unlawful killing of another human being without justification or valid excuse, especially the unlawful killing of another human being with malice aforethought.

Police Officers

Law enforcement professionals responsible for maintaining public order, enforcing laws, and preventing, detecting, and investigating crimes.

Body-Worn Cameras

Portable recording devices worn on the body by law enforcement officers to capture interactions with the public and gather evidence.