Increasing All Accounts by a fiXed Percentage May Not Be

question 335

Multiple Choice

Increasing all accounts by a fixed percentage may not be the best financial planning model because:

• A) The debt-equity ratio would vary.
• B) Not all accounts vary directly with sales.
• C) The model is difficult to use.
• D) The growth percentage is difficult to predict.
• E) The retention ratio must be held constant.

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Definitions:

Agent's Crime

Illegal acts committed by an individual (agent) acting on behalf of another party.

Scope of Employment

The range of activities an employee is reasonably expected to do as part of their job.

Principal

A person or entity who authorizes another (the agent) to act on their behalf, often in a legal or business context.

Liable

Being legally responsible for something, typically a debt or a legal obligation.