What Is the Most Common Way That Agency Conflict Problems

question 11

Multiple Choice

What is the most common way that agency conflict problems are addressed in most corporations?

• A) by minimizing the number of decisions that a manager makes where there is a conflict between the managers interests and those of the shareholders
• B) by terminating the employment of employees who are found to have put their own interests above those of the company
• C) by using disinterested outside bodies to adjudicate between managers and shareholders when such conflicts arise
• D) by prosecuting managers who have been found to have illegally used company moneys for their own benefit

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Definitions:

Inventory Account

An account on the balance sheet that reports the value of a company's products that are ready for sale but have not yet been sold.

Statement Of Income

A financial statement showing a company's revenues, expenses, and net profit or loss over a specific period.

Purchase Returns

Goods returned by the buyer to the seller due to defects, excess supply, or other reasons.