Which of the Following Statements About Agency Theory Is NOT

question 19

Multiple Choice

Which of the following statements about agency theory is NOT true?

• A) Agency theory tends to focus on the stewardship role of accounting information.
• B) Agency theory develops ideas about how the agent can be induced to act properly.
• C) Something to be eliminated before a contract can be finalised.
• D) For the agent,effort is costly and therefore to be minimised.

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Definitions:

Total Assets

The sum of all assets owned by a company at a given time, including current, fixed, and intangible assets.

Stockholders' Equity

The residual interest in the assets of an entity after deducting its liabilities, representing the ownership interest of the shareholders.

Fees Earned

Income earned through the delivery of services.

Wages Expense

An account representing the total cost of labor paid to employees, typically recorded over a specific accounting period.