Which of the Following Statements About the Quality of Income

question 48

Multiple Choice

Which of the following statements about the quality of income ratio is incorrect?

• A)An increase in operating assets and a decrease in liabilities will reduce operating cash flows and thereby reduce the quality of income ratio.
• B)Seasonal variations in sales and purchases of inventory can cause wide deviations in the quality of income ratio.
• C)When sales are growing,receivables and inventory normally increase at a faster rate than accounts payable,which often causes cash flows from operating activities to be less than net income.
• D)Aggressive revenue recognition tends to increase the quality of income ratio.

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Definitions:

Marketing Mix

A blend of elements under a company's control designed to motivate purchases by consumers, often referred to as the product, price, location, and advertising.

Commercial

An advertisement broadcast on television or radio, designed to promote and sell a product or service to the public.

Hulu

A streaming service that offers a wide range of TV shows, movies, and original content across various devices.

Marketing Mix

The blend of product, price, place (distribution), and promotion strategies used by a business to market its products or services effectively.