Which Statement Concerning Liabilities Is Untrue

question 3

Multiple Choice

Which statement concerning liabilities is untrue?

• A) Borrowing to finance assets provides the potential for greater returns for owners but also means greater risk.
• B) The absolute value of liquidity ratios is usually more important than their trend over time.
• C) A difference between an accounts payable and a bills payable is that the liability created with a bills payable is evidenced by a bills payable or a promissory note.
• D) Leverage is the use of borrowed funds in an attempt to earn a return greater than the interest paid on the borrowings.

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Definitions:

Mere Exposure Effect

An occurrence in psychology where individuals often favor items or concepts just because they are accustomed to them.

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, with the association formed between behavior and its consequences.

Praises

Expressions of approval or admiration towards someone or something, often used as a form of encouragement or recognition.

Denies Dessert

The choice to refuse or not partake in a sweet course following a meal, often for health, dietary, or personal reasons.