An Employee of Susann Inc

question 76

Multiple Choice

An employee of Susann Inc. failed two drug tests. The employee has sued and Susann Inc.'s. lawyers appropriately believe that, at best, it is only reasonably possible that Susann Inc. will lose the court case. The proper accounting treatment of the lawsuit will

• A)increase earnings per share.
• B)increase the debt/asset ratio.
• C)decrease the current ratio.
• D)not affect the debt/equity ratio.

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Definitions:

Vigorous Competition

Vigorous competition refers to a market condition characterized by strong rivalry among firms, aiming to outperform one another in price, quality, and service.

Short Run

In economics, a period during which at least one input or factor of production is fixed, focusing on immediate outcomes.

Output Quantity

Refers to the total amount of goods or services produced by a company or within an economy during a specific time period.

Profit Maximizing

A strategy or point where a firm achieves the highest possible profit given its production costs, sales price, and output level.