Which of the Following Are Not Approaches to Resolving the Principal-Agent

question 12

Multiple Choice

Which of the following are not approaches to resolving the principal-agent problem?

• A) ex ante incentive alignment
• B) deferred stock options
• C) ex post governance mechanism
• D) straight salary contracts
• E) monitoring by independent outside directors

---

Definitions:

Direct Write Off Method

An accounting practice where uncollectable accounts receivable are directly removed from the books when deemed uncollectible.

Direct Write-off Method

An accounting practice where uncollectible accounts receivable are directly written off against income at the time they are deemed unrecoverable.

General Journal

The general journal is an accounting ledger in which all types of transactions are initially recorded before they are posted to specific accounts in the general ledger.

Direct Write Off Method

An accounting method where uncollectible accounts receivable are written off directly against income at the time they are deemed uncollectible.