Which of the Following Is an Incentive for Managers to Understate

question 3

Multiple Choice

Which of the following is an incentive for managers to understate their company's earnings?

• A)To gain from increasing share prices
• B)To get the government help against foreign competitors
• C)To increase the value of pension
• D)To increase the return on assets

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Definitions:

Pleasure Principle

A psychoanalytic concept where behavior is driven by the desire to seek pleasure and avoid pain, primarily associated with the id aspect of personality.

Repression

A defense mechanism where unwanted thoughts or desires are unconsciously pushed out of conscious awareness.

Defense Mechanism

A defense mechanism is a psychological strategy unconsciously used to protect oneself from anxiety arising from unacceptable thoughts or feelings.

Anxiety-Arousing Thoughts

Internal cognitions or thoughts that trigger or increase feelings of anxiety, fear, or unease.