Which one of the following statements is TRUE?
A. An example of asset switching is when a company borrows for a new manufacturing facility but then uses it to repurchase its own stock.
B. An example of an agency cost is when an attorney hires an expert witness for a trial.
C. The commission required by the Federal Housing Agency for a small business loan is an example of an agency cost.
D. An example of an agency cost is the salary of the agent hired to work for the principal.
E. Creditors have a claim on a firm's earning stream through the dividend payments they receive.
Answer: A
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As a result of analytical procedures conducted during the planning phase, the independent auditor determines that the gross profit percentage has declined from 30% in the preceding year to 20% in the current year. The auditor should:
A. Express an opinion that is qualified due to the inability of the company to continue as a going concern. B. Consider the possibility of an error in the financial statements. C. Evaluate management's performance in causing this decline. D. Require footnote disclosure.
Alex was told that her athletes were lazy and negative, causing her to be less than excited about serving as their coach. By the end of the season, she agreed that it was the worst team she had ever coached. She also recognized that her behavior may have further contributed to their negative attitudes. This is an example of which of the following perceptual errors?
A. impression management B. self-fulfilling prophecy C. recency effect D. primacy effect
Relationship marketing is also known as ________
A) one-to-one marketing B) niche marketing C) mass marketing D) viral advertising E) word-of-mouth advertising
Some editors, especially in the biological and physical sciences, prefer to omit the ____________ and to capitalize the first word of the title
a. author's name b. publication date c. publisher's name d. quotation marks around the title