Which of the Following Statements Is CORRECT

question 89

Multiple Choice

Which of the following statements is CORRECT?

• A) Borrowing by using short-term notes payable and then using the proceeds to retire long-term debt is an example of "window dressing." Offering discounts to customers who pay with cash rather than buy on credit and then using the funds that come in quicker to purchase additional inventories is another example of "window
• Dressing."
• B) Borrowing on a long-term basis and using the proceeds to retire short-term debt would improve the current ratio and thus could be
• Considered to be an example of "window dressing."
• C) Offering discounts to customers who pay with cash rather than buy on credit and then using the funds that come in quicker to purchase
• Additional inventories is an example of "window dressing."
• D) Using some of the firm's cash to reduce long-term debt is an
• Example of "window dressing."
• E) "Window dressing" is any action that improves a firm's fundamental, long-run position and thus increases its intrinsic value.

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Definitions:

Optimistic

A mindset or attitude characterized by the expectation of positive outcomes or a general belief that good things will happen.

Julian Rotter

An American psychologist known for his work in social learning theory and the development of the concept of locus of control.

Behavioral Theorist

A researcher or theorist who focuses on how observable behavior is learned and shaped through interaction with the environment.

Skinner's Ideas

Refers to the concepts and theories developed by B.F. Skinner, particularly those related to behaviorism and operant conditioning.