Which of the Following Factors Would Not Be Considered in Determining

question 92

Multiple Choice

Which of the following factors would not be considered in determining if compensation paid to a shareholder/employee is reasonable?

• A) The individual's duties and responsibilities.
• B) What individuals performing in comparable capacities at other companies are paid.
• C) Whether the corporation has a formal compensation policy.
• D) The individual's marginal income tax rate.

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Definitions:

Unrealised Profit

Profit that has been made on paper through an investment but has not yet been cashed in by selling the asset.

Upstream

In a supply chain context, refers to processes or activities that occur at the beginning of the production process or closer to the raw materials stage.

Downstream

Refers to the refining of petroleum crude oil and the processing and purifying of raw natural gas, as well as the marketing and distribution of products derived from crude oil and natural gas.

Unrealised Profit

Profit that has been generated on paper through an increase in the value of an asset but has not yet been realized through a sale.