Streeter & Sons Is a Regional Service Company That Has

question 242

Short Answer

Streeter & Sons is a regional service company that has been in business for a few years, but has not employed a controller or anyone else full-time to keep track of its financial state. The company needs to take a good look at its financial state to determine whether it needs to make any changes in its practices, in order to prevent possible financial meltdown.
Which of the following, if true, would strengthen the case that Streeter & Sons will be able to meet its current financial obligations?
The company has high levels of accounts payable.
The company's liabilities exceed its assets.
The company currently has a negative cash flow.
The company needs to expand its number of customers.
The company has more assets than it has liabilities.

---

Definitions:

Regressive Tax

A tax system where the tax rate decreases as the taxable amount increases, disproportionately affecting lower-income earners.

Progressive Taxation

The tax as a percentage of income increases as income increases.

Proportional Taxation

The tax as a percentage of income remains constant as income increases; also called a flat tax.

Regressive Taxation

The tax as a percentage of income decreases as income increases.