Which of the Following Statements Is Correct

question 50

Multiple Choice

Which of the following statements is correct?

• A)Repayment of a bond on the first day of the fiscal year will decrease the shareholders' return on equity.
• B)Conversion of a 10% bond with no short term maturity, into common shares on the first day of the year will have no effect the current ratio.
• C)The sale of 2,000 common shares for cash will improve the shareholders' return on equity.
• D)The sale of $5,000 of inventory on credit for $6,000 will have no effect on the operating margin.

---

Definitions:

Profit Maximizes

The process or strategy of adjusting production and sales to achieve the highest possible profit.

Same Price

Indicates a situation where an item or service is offered for sale at an identical monetary value in different contexts or locations.

Monopolist

A single seller in a market who has significant control over the price and supply of a unique product or service.

Total Revenue

The overall amount of money generated by a firm from selling its goods or services before any costs or expenses are deducted.