Which of the Following Statements Is Correct

question 98

Multiple Choice

Which of the following statements is correct?

• A) There have been no significant observed differences in the capital structures of U.S.corporations in comparison to their German and Japanese counterparts.
• B) Different countries use essentially the same international accounting conventions with respect to reporting assets on a historical versus replacement cost basis.
• C) An analysis of both bankruptcy and equity reporting costs leads to the conclusion that U.S.firms should have more equity and less debt than firms in Japan and Germany.
• D) Equity monitoring costs are higher in the United States than in Japan and Germany.
• E) Debt monitoring costs are probably lower in the United States than in Japan and Germany.

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Definitions:

Weighted-Average Method

An inventory costing method that assigns an average cost to each unit of inventory, based on the weight of its cost in total inventory.