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:

ASE Certified

A certification from the National Institute for Automotive Service Excellence indicating that an individual has met specific criteria in automotive repair and service.

Automotive Technology

The study and application of engineering, design, and technological innovations in the manufacturing and maintenance of automobiles.

Continuous Training

A form of exercise that involves prolonged, steady activity without rest intervals, typically utilized to improve cardiovascular fitness.

Cathode

An electrode or conductor from which current flows out.