Which of the Following Statements Is False

question 1

Multiple Choice

Which of the following statements is false?

• A) Most financial analysts and sophisticated investors consider operating leases (which must be listed in the footnotes of the financial statements) to be additional sources of leverage.
• B) By carefully avoiding the four criteria that define a operating lease for accounting purposes, a firm can avoid listing the long-term lease as a liability.
• C) Because a lease is equivalent to a loan, the firm can increase its actual leverage without increasing the debt-to-equity ratio on its balance sheet.
• D) For most large corporations, the amount of leverage the firm can obtain through a lease is unlikely to exceed the amount of leverage the firm can obtain through a loan.

Understand the impact of misleading communications, including fraud, on stakeholders.

Differentiate ethical issues from legal issues in business practices.

Comprehend the role of ethical decision-making in the business context, including the beginning of the ethical decision-making process.

Understand the concept of conflicts of interest and their implication in the workplace.