Which of the Following Statements Is Correct

question 69

Multiple Choice

Which of the following statements is correct?

• A)Repayment of a bond on the first day of the fiscal year will increase 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 improve the current ratio.
• C)The sale of 2,000 common shares for cash will worsen the shareholders' return on equity.
• D)The sale of $5,000 of inventory on credit for $6,000 will worsen the shareholders' return on equity.

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Definitions:

Case Opener

A tool or device designed to open protective casings, commonly associated with packaging or equipment maintenance.

Privilege

A special right, advantage, or immunity granted to a particular person or group.

Commercial Insurance

is a type of insurance designed to protect businesses from losses due to events that may occur during the normal course of business, such as property damage or liability claims.

Business Risk

The potential for losses or less-than-expected returns stemming from the economic, industry, or company-specific factors.