Should assets be defined as total assets or net assets? This question is considered part of which step in designing an accounting-based performance measure?
A)Choose performance measures that align with top management's financial goals.
B)Choose the time horizon of each performance measure.
C)Choose a definition for each performance measure.
D)Choose a measurement alternative for each performance measure.

Question

Quizplus · Accepted Answer

This question is related to choosing the definition for the performance measure, hence the answer is C. The question is asking whether the assets being measured should be total assets or net assets, which highlights the importance of defining the measure clearly to avoid any confusion or misinterpretation.

Should Assets Be Defined as Total Assets or Net Assets