Which of the Following Statements Is Correct

question 21

Multiple Choice

Which of the following statements is correct?

• A)In the text, depreciation is regarded as a use of cash because it reduces fixed assets, which then must be replaced.
• B)If a company uses some of its cash to pay off short-term debt, then its current ratio will always decline, given the way ratio is calculated, other things held constant.
• C)During a recession, it is reasonable to think that most companies inventory turnover ratios will change while their fixed asset turnover ratio will remain fairly constant.
• D)During a recession, we can be confident that most companies' DSOs (or ACPs) will decline because their sales will probably decline.
• E)Each of the above statements is false.

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Definitions:

Endosymbiosis

A theory explaining the origin of eukaryotic cells from prokaryotic organisms through a symbiotic relationship.

Chloroplast

A type of organelle found in plant cells and some algae, which is the site of photosynthesis and responsible for producing energy through light.

Thylakoid Membrane

The thylakoid membrane is a component of chloroplasts that houses the machinery for the light reactions of photosynthesis, including the chlorophyll pigments.

Endosymbiotic Theory

Explanation of the evolution of eukaryotic organelles by phagocytosis of prokaryotes.