Profits Are Down So the Controller Decides to Change the Corporation's

question 48

Multiple Choice

Profits are down so the controller decides to change the corporation's accounting policy relating to inventory costing.The change will allow the corporation to report higher income and higher assets,although the physical inventory has not changed.Which of the following statements is most correct?

• A) The stock price is likely to increase because income is higher.
• B) The stock price is likely to be unaffected because the stock market is efficient.
• C) The stock price is likely to decrease because reported inventory is higher.
• D) If the stock price increases, the stock market is efficient.

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Definitions:

Nasopharynx

The upper part of the throat that lies behind the nose and above the soft palate, serving as a passageway for air from the nose to the throat and lungs.

Laryngopharynx

The region of the throat that connects the oropharynx above with the trachea and esophagus below, facilitating the passage of food and air.

Catabolism

The breakdown of complex molecules in living organisms to form simpler ones, often releasing energy.

Complex Substances

Materials composed of two or more chemical elements or compounds, having intricate and multifaceted structures.