One of the Major Criticisms of Executive Compensation in the United

question 86

Multiple Choice

One of the major criticisms of executive compensation in the United States is that:

• A)despite their high pay,top managers usually work fewer hours than other employees in the firm.
• B)the compensation of top executives often seems to have little or no relationship to how well their companies are performing.
• C)top executives' compensation does nothing to encourage them to improve the value of their company's stock.
• D)many U.S.executives are paid much less than their counterparts earn in Europe and Japan.

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Definitions:

Bad Debts Expense

An expense account to record accounts receivable that a company does not expect to collect.

Allowance for Doubtful Accounts

A contra-asset account designed to predict the value of receivables that are expected to be uncollectible.

Direct Method

A cash flow statement preparation approach that lists major cash receipts and payments during the period.