Which of the Following Is Not True Regarding Agency Theory

question 30

Multiple Choice

Which of the following is not true regarding agency theory?

• A)It is also called contracting theory.
• B)Its underlying assumption is that individuals act in their own best self-interest.
• C)Few agency relationships between parties may be defined or governed by accounting numbers.
• D)It is concerned with the various costs of monitoring and enforcing relations among management, owners, creditors, and government.

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Definitions:

Wholesale Cost

The price charged for a product by the wholesaler, which is typically lower than the retail price.

Accounts Payable Balance

The total amount of money a company owes to its suppliers or creditors at a given point in time.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the material and labor costs.

Prior Quarter Sales

The total revenue generated by a business in the quarter immediately preceding the current one.