Rewarding Executives for Increasing Quarterly Earnings Will Motivate Them to Act

question 58

True/False

Rewarding executives for increasing quarterly earnings will motivate them to act in the long-term best interests of shareholders.

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Definitions:

Accounting and Financial Reporting

The process of recording, summarizing, and reporting the financial transactions of a business to provide an accurate picture of its financial position and performance.

Liability

Anything owed to creditors—the claims of a company’s creditors.

Creditors

Individuals or institutions to whom money is owed by a debtor or borrower.

Business

Organizational entities that are involved in the trade of goods, services, or both to consumers, with the primary purpose of earning profits.