The Primary Difference Between a Layoff and a Discharge Is

question 66

Multiple Choice

The primary difference between a layoff and a discharge is:

• A) a layoff is an involuntary separation and a discharge is a voluntary separation.
• B) a layoff is a voluntary separation and a discharge is an involuntary separation.
• C) a discharge occurs when the company's strategy forces it to reduce its workforce and a layoff occurs when there is a poor fit between the employee and the organization.
• D) a layoff occurs when the company's strategy forces it to reduce its workforce and a discharge occurs when there is a poor fit between the employee and the organization.

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Definitions:

Accruals

Accounting method recognizing revenue when earned and expenses when incurred, regardless of when cash transactions occur.

Doubtful Accounts

Receivables that a company is unlikely to collect, representing amounts owed by customers that might eventually be written off as bad debts.

Operating Activities

Business actions that relate directly to the production, sale, and delivery of a company's goods or services, reflected in its cash flow.

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profit that excludes interest and income tax expenses.