Using profit as the sole guide for corporate action can lead to short term profits but: B a.) increased corporate social responsibility options b.) long-term loss of customers c.) more complicated measurement challenges d.) increased tax liabilities

Using profit as the sole guide for corporate action can lead to short term profits but: B a.) increased corporate social responsibility options b.) long-term loss of customers c.) more complicated measurement challenges d.) increased tax liabilities

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter8: Fraud, Internal Controls, And Cash

Section: Chapter Questions

Problem 17MC: What would be a reason a company would want to understate income? A. to help nudge its stock price...

See similar textbooks

Related questions

Q: What is the impact of decrease in assets or increase in liabilities resulting in decreases in…

A: when the assets reduces, the profits of the company also tends to fall. there can be no chance of…

Q: DEBT MAY BE BENEFICIAL IN CORPORATE GOVERNANCE FOR THE FOLLOWING REASONS EXCEPT: Select one: O a.…

A: CORPORATE GOVERNANCE: These are the rules the firm need to follow and through which firms are…

Q: Do you agree with the view that a company which reports substantial profits within its statement of…

A: Profit is the income which is earned after deducting all the expenses from the revenues of a period.…

Q: The objectives of financial management are Select one: O a. None of the options O b. Profit…

A: Financial or money management is done to maximize wealth in long term and profit in short term…

Q: Which of the following statements is CORRECT? a. A good goal for a rm's management is maximization…

A: Agency problems refer to the problems that arise due to the conflict of interest among the manager…

Q: Which of the following is a financial synergy?

A: Due to synergies from mergers and acquisitions improve their debt capacities. Low cost of capital.

Q: Which one of the following is not an effect of an increase in leverage Managers have fewer…

A: Increases in leverage means introducing more debt into capital structure.

Q: Which of the following could be the reason for the capital increase of a collective company? A) The…

A: Collective company- A collective business system, also known as a collective business model, is a…

Q: . The relationship between a firm's capital structure and other company attributes As a firm…

A: As a firm takes on more debt, its probability of bankruptcy increases. Other factors held constant,…

Q: Why do companies accelerate depreciation on their tax return but often use slower depreciation…

A: Companies generally use accelerated depreciation on their tax return, as these methods result in a…

Q: managers speak as if the corporation has other goals. For example, they may say that their job is to…

A: Shareholder wealth maximization is the goal to maximize the market value of the firm and thus…

Q: Which ONE of the following statements is FALSE? O Firms report peripheral gains and losses on a…

A: Restructuring is a process in which company change their capital structure, and debt convert into…

Q: Why is the income tax payable not the same as income tax expense? Why is the income tax expense…

A: Hey, since there are multiple questions posted, we will answer three question. If you want any…

Q: ____________ is a short-term goal. It can be achieved at the expense of the firm and its…

A: Short term goals of the business means those objectives or goals which needs to be completed or…

Q: What would be a reason a company would want to understate income?A. to help nudge its stock price…

A: Profitability of the business is an important measure for business evaluation. It depends on the…

Q: Speak using the article style about the decision to distribute profits and its importance. Then he…

Q: intrinsic

A: The board of directors of the company generally expect the management to focus on maximizing the…

Q: Can you identify a possible explanation for the company’s declining profits? If so, what is it?

A: Company's declining profits can be possible due to overhead expenses. Overhead costs are the…

Q: Why do you think companies use revenue recognition as a primary means for inflating profits?

A: Revenue Recognition: Revenue recognition is the recording of revenues in the books of the company…

Q: Please select the option that best analyzes the PROFIT MARGIN for our example company. The profit…

A: Profit margin is the percentage of sales, which explains how much profit a firm can earn for…

Q: The difference between the market value of the firm and the amount of money invested in the firm is…

A: An investor takes into consideration the market value of the company to decide whether investment…

Q: Identify and explain each of the if it encourage a firm to increase or decrease debt in its capital…

A: Answer a: If there is an increase in the corporate tax rate, it would encourage a firm to increase…

Q: Which of the following statements is likely to be true, for a company making profits? Select one:…

A: All the transactions of the company that are happened during the year will be recorded first in the…

Q: Decide which of the following statements are true. I. In most circumstances, the owners of…

A: Answer : Option (a).One is true is correct.

Q: Discuss and explain the difference between profit/loss and cash flow.

A: Given: The difference between the profit/loss and cash flow of the finance of the entity or an…

Q: In times of crisis companies are often seen to be paying stable dividends. The question however is,…

A: Introduction: Dividend is a part of profits which is distributed among its shareholders. In the…

Q: Which of the following statements is NOT CORRECT? The corporate valuation model can be used both for…

A: Corporate valuation is a systematic process to find the true value based on financial data. Most of…

Q: Which of the following statements is CORRECT? * Assume a corporation has less debt than what is…

A: The capital structure is a technique in which the company has use the mix use of debt and equity to…

Q: Which of the following statements is CORRECT? * A company can use its retained earnings without…

A: Optimal capital structure: The optimal capital structure can be simply defined as the combination of…

Q: Advantages of the corporate form of business, over other forms, include all of the following except:…

A: A business organization is defined as an entity that is being incorporated with the aim to carry on…

Q: Explain intuitively how a manager could tweak the salvage value of machinery to benefit from an…

A: Depreciation is an expense that decreases the Net profits of the firm, Managers might reduce the…

Q: Assuming that the fiscal health of the Health Company is not optimal, explain how Return on Equity…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: Which of the following factors reflect pure market risk for a given corporation?a. Increased…

A: Market risk is also known as systematic risk, it cannot be eliminated completely. The impact of…

Q: If the present value of a firm’s marginal financial distress costs are less than the present value…

A: Capital Structure refers to arrangement of sources of finance from which capital of firm is finance.…

Q: Which of the following may reduce the effectiveness of ratio analysis? a. Highly diversified…

A: As this is multiple choice question, lets discuss all the options properly and comes to conclusion…

Q: ______________ is the ultimate objective of a finance manager in a business organization. a. Profit…

A: Because of more engagement in the business operations, the financial manager is more efficient in…

Q: On Introduction to financial management Statement I: Profit maximization is a short-term goal. It…

A: Financial management included activities related to planning, organizing, and monitoring the…

Q: True of False? Contributed capital decreases when the company has a net loss. If your answer is…

A: Net income is an excess of revenue over expenditure and Net loss indicates that there are more…

Question

Using profit as the sole guide for corporate action can lead to short term profits but: B
a.) increased corporate social responsibility options
b.) long-term loss of customers
c.) more complicated measurement challenges
d.) increased tax liabilities

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What would be a reason a company would want to overstate income? A. to help nudge its stock price higher B. to lower its tax bill C. to show a decrease in overall profits D. none of the above
What would be a reason a company would want to understate income?A. to help nudge its stock price higherB. to lower its tax billC. to show an increase in overall profitsD. to increase investor confidence
4) Why do loss-making companies still pay a dividend?A) The tax benefits exceed the loss incurred in paying the dividend.B) Managers want to signal that the decline in earnings is temporary and that positive earnings are expected in the future.C) Managers realise that reduced dividends will result in lower staff motivation.D) Managers want to signal that the decline in earnings is permanent and shareholders should take their profits.
Indicate whether each of the following statements is true or false. Support vour answers with relevant explanations. A) The higher the proportion of equity in a company's overall capital structure the higher return required by its debtholders.B) In the presence of corporate taxes, a company would prefer to raide debt only when the benefits of the tax shield fully offset the cost of debt. C) In the presence of bankruptcy risk, the cost of capital of a company with debt is always higher than the cost of capital of an unlevered company.
All of the following are likely to result in the use of less debt in a company's capital structure EXCEPT A. desire to maintain a high credit rating. B. desire to maintain financial flexibility. C. insufficient internal funds. D. a decrease in a company's marginal tax rate.
Which of the following factors reflect pure market risk for a given corporation?a. Increased short-term interest rates.b. Fire in the corporate warehouse.c. Increased insurance costs.d. Death of the CEO.e. Increased labor costs.
Economic consequences of accounting standard-setting means: a. standard-setters must give first priority to ensuring that companies do not suffer any adverse effect as a result of a new standard. b. standard-setters must ensure that no new costs are incurred when a new standard is issued. c. the objective of financial reporting should be politically motivated to ensure acceptance by the general public. d. accounting standards can have detrimental impacts on the wealth levels of the providers of financial information.
Economic consequences of accounting standard-setting means:a. standard-setters must give fi rst priority to ensuring that companies do not suffer any adverseeffect as a result of a new standard.b. standard-setters must ensure that no new costs are incurred when a new standard is issued.c. the objective of financial reporting should be politically motivated to ensure acceptance by thegeneral public.d. accounting standards can have detrimental impacts on the wealth levels of the providers of financialinformation.
Please answer the following follow up questions Indicate whether each of the following statements is true or false. Support your answers with the relevant explanations. d) The higher the proportion of equity in a company’s overall capital structure, thehigher return required by its debtholders. (Explain your reasoning – in yourexplanation, provide a numerical example supporting your answer.) e) In the presence of corporate taxes, a company would prefer to raise debt onlywhen the benefits of the tax shield fully offset the cost of debt. (Explain yourreasoning – in your explanation, provide a numerical example supporting youranswer.) f) In the presence of bankruptcy risk, the cost of capital of a company with debt is always higher than the cost of capital of an unlevered company. (Explain yourreasoning – in your explanation, provide a numerical example supporting youranswer.)
Indicate whether each of the following statements is true or false. Support your answers with the relevant explanations. a) The higher the proportion of equity in a company’s overall capital structure, thehigher return required by its debtholders. (Explain your reasoning – provide a numerical example supporting your answer.) b) In the presence of corporate taxes, a company would prefer to raise debt onlywhen the benefits of the tax shield fully offset the cost of debt. (Explain yourreasoning – provide a numerical example supporting youranswer.) c) In the presence of bankruptcy risk, the cost of capital of a company with debt is always higher than the cost of capital of an unlevered company. (Explain yourreasoning –, provide a numerical example supporting youranswer.)
‏.......theory would deduce that corporate growth causes an increase in shareholder remittance . Select one : a . Agency Theory b . Normative Accounting c . None of the other Points d . Positive Accounting
The objectives of financial management are Select one: O a. None of the options O b. Profit maximization and wealth maximization O c. Wealth maximization O d. Maximize profits and reduce the employees O e. Profit maximization