Which of the Following Would Generally Indicate an Improvement in a Company's

question 76

Multiple Choice

Which of the following would generally indicate an improvement in a company's financial position,holding other things constant?

• A) The TIE declines.
• B) The DSO increases.
• C) The quick ratio increases.
• D) The current ratio declines.
• E) The total assets turnover decreases.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired, representing the loss of value over time.

Residual Value

The estimated amount that an asset will realize upon its sale at the end of its useful life.

Straight-Line Depreciation

A method of accounting in which an asset's cost is evenly distributed over its useful life to represent its consumption.

Depreciable Cost

The total cost of an asset that is subject to depreciation over its useful life, excluding any salvage value.