Different Companies Using the Same Accounting Principles Is an Application

question 180

Multiple Choice

Different companies using the same accounting principles is an application of

• A)consistency.
• B)materiality.
• C)full disclosure.
• D)comparability.

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Definitions:

EFN

Expected Funds Needed, an estimation of the additional financing a company will require in the future based on its projected growth and existing financial structure.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales and earnings without increasing leverage or debt financing.

Leverage Ratios

Financial metrics that assess the level of debt in a company's capital structure relative to its equity or assets.

Dividend Policy

A company's approach to distributing profits back to its shareholders, whether through cash dividends, stock dividends, or share repurchase plans.