Which of the Following Statements Is Incorrect

question 53

Multiple Choice

Which of the following statements is incorrect?

• A)The quicker a company collects money from its customers the greater its liquidity, all else equal.
• B)The more quickly a company turns over its inventory, the greater its liquidity, all else equal.
• C)The lower a company's depreciation the greater its liquidity, all else equal.
• D)The greater a company's profit margin the greater its liquidity, all else equal.

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Definitions:

Clearly Specified

means stated or described in a manner that leaves no ambiguity regarding the details or requirements.

Past Consideration

Anything given or promised to be given in the past, which cannot be considered valuable in the context of forming a current contract.

Law of Consideration

A principle in contract law that requires an exchange of something of value between the contracting parties.

Specific

Clearly defined or identified; particular and distinct.