The only legitimate grounds on which the supervisor may take action is the employee's behavior. Personal beliefs, such as those an religious and political matters, cannot be the basis of personnel actions. Discrimination an the basis of personal beliefs could expose the organization to legal action.

In a consolidated balance sheet, reciprocal balances, such as receivables and payables, between a parent and a consolidated subsidiary should be eliminated in their entirety regardless of the portion of the subsidiary's shares held by the parent. Thus, all effects of the US $1 .000.000 loan should be eliminated in the preparation of the year-end consolidated balance sheet.

An entity can mitigate a possible loss by using hedges to offset risk. Thus, an entity is said to hedge its financial positions. One of the criteria for hedge accounting is that the hedge be continually assessed and determined to have been effective. Thus it is not assessed only at its inception.

Physical distribution is the efficient management of supply chains. It controls value-added flows from suppliers to consumers.