Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

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Multiple Choice

Which of the following is a disadvantage of a pay structure that rewards employees primarily for receiving promotions?

It ensures that all employees are paid equally regardless of their responsibilities.

It discourages employees from developing new skills.

It reduces the overall payroll expenses for the company.

It may encourage employees to seek promotions even if they are not ready, leading to mismatched roles.

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Verified step by step guidance

Understand the context of the question: The problem is asking about a disadvantage of a pay structure that rewards employees primarily for receiving promotions. This means the focus is on how such a system might negatively impact employees or the organization.

Analyze the options provided: Each option represents a potential disadvantage. Carefully evaluate each one to determine if it aligns with the described pay structure and its potential drawbacks.

Option 1: 'It ensures that all employees are paid equally regardless of their responsibilities.' This is not a disadvantage of a promotion-based pay structure. In fact, such a structure typically creates pay differences based on promotions, not equality.

Option 2: 'It discourages employees from developing new skills.' This is not directly related to a promotion-based pay structure. In fact, employees might be motivated to develop skills to qualify for promotions.

Option 4: 'It may encourage employees to seek promotions even if they are not ready, leading to mismatched roles.' This is a valid disadvantage because employees might prioritize promotions over their actual readiness or suitability for the role, potentially leading to inefficiencies or mismatches in responsibilities.