How can family members working in a family-owned business be compensated?
What will be an ideal response?
Compensating family members and dividing profits among them can be difficult because some of them may feel they contribute more to the success of the firm than others. Compensation should be based on job performance, not family position. Fringe benefits can be useful as financial rewards, but they must conform to those given to nonfamily employees. Stock can be established as part of the compensation plan. Deferred profit-sharing plans, pension plans, insurance programs, and stock purchase programs can all be effective in placating disgruntled family members, as can a managerial title-if deserved. When success leads a company into the second generation, titles start to matter to the younger relatives. A title is perceived as a confirmation of a job well done and also tends to serve as a motivator. This technique must be used carefully, however, to avoid counterproductive behavior in the future.
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Failure to adjust for expired prepaid insurance at year end will result in an
A) overstatement of liabilities. B) understatement of assets. C) understatement of stockholders' equity. D) overstatement of net income.
Foreign stock markets are frequently characterized by controlling shareholders for the individual publicly traded firms. Which of the following is NOT identified by the authors as typical controlling shareholders?
A) the government (for example, privatized utilities) B) institutions (such as banks in Germany) C) family (such as in France) D) All of the above were identified by the authors as controlling shareholders.
An additional element in a LAN that has both physical and logical characteristics is the LAN's topology
Indicate whether the statement is true or false
Acorn and Bean were general partners in a farm machinery business. Acorn contracted, on behalf of the partnership, to purchase 10 tractors from Cobb Corp Unknown to Cobb, Acorn was not authorized by the partnership to make such contracts. Bean refused to allow the partnership to accept delivery of the tractors, and Cobb sought to enforce the contract. Cobb will:
a. Lose, because Acorn's action was beyond the scope of Acorn's implied authority. b. Prevail, because Acorn had implied authority to bind the partnership. c. Prevail, because Acorn had apparent authority to bind the partnership. d. Lose, because Acorn's express authority was restricted, in writing, by the partnership agreement.