ETH557 final exam

1. When evaluating the performance of managers in investment centers, performance metrics should be based on

2.Agency costs arise when agents fail to act in the best interests of the principals. One example of losses from poor decisions would be

3. ABC Company owes XYZ Enterprises $1 million for goods purchased from XYZ over a year ago. XYZ Enterprises continues to list the $1 million in their accounts receivable balance and does not record any allowance for doubtful accounts. XYZ Enterprises is failing to follow

4.When applying for a bank loan or trade credit, one way a company can appear to be in a healthier financial position would be to

5.If a conflict of interest arises prior to entering into a business contract, the parties should

6.When revenue is recognized and shipment has not been made and the criteria for recognizing revenue on bill-and-hold transactions set out in SEC Staff Accounting Bulletin No. 101 have not been met, this is known as

7.Many conflicts of interest in business contracts can be remedied ethically by which of the following?

8.In 2003, FASB and IASB met and established four criteria for establishing revenue recognition. To recognize revenue, which of the following conditions must be present?

9.The EU Privacy Directive presents problems for the United States in that

10.When budgets are used to measure performance, there is a danger that budgetary slack may occur. This happens when