A condition where individuals receive in proportion to what they give in a relationship describes which concept?

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Study for the ASU ACC502 Financial Accounting Exam. Practice with comprehensive quizzes and detailed explanations. Prepare with confidence!

The concept that best describes a condition where individuals receive in proportion to what they give in a relationship is equity. Equity encompasses the idea of fairness and balance in transactions and relationships, suggesting that the contributions of all parties are considered and valued appropriately. It reflects a sense of justice in distribution, ensuring that rewards or benefits are aligned with inputs.

In financial terms, equity can also refer to ownership in an asset, where the value is proportional to the investment made. This principle is fundamental in both personal relationships and professional settings, as it encourages trust and satisfaction among participants when their contributions are acknowledged and rewarded fairly.

The other options, while important concepts in financial accounting, do not capture the essence of proportional relationships as thoroughly as equity does. Liability focuses on obligations that a company has, accountability refers to the obligation to explain and justify actions and decisions, and profitability relates to the ability of an organization to generate earnings. Therefore, equity is the most fitting choice to describe this proportional relationship.

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