If a Director Makes a Decision That Inadvertently Harms the Company

question 29

True/False

If a director makes a decision that inadvertently harms the company, shareholders can hold the director liable for the bad decision under all circumstances.

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Definitions:

Direct Method

In accounting, a cash flow statement preparation approach that lists specific cash inflow and outflow categories directly.

Operating Activities

Business activities directly related to the production, sale, and delivery of a company's products and services, generating revenue and expenses.

Accounts Receivable

Receivables due from clients to a business for products delivered or services performed but not yet compensated.

Income Tax Payable

Represents the amount of income tax owed to the government that has not yet been paid.