SBL Corporation's Accounting Records Were Destroyed in a Fire

question 39

Multiple Choice

SBL Corporation's accounting records were destroyed in a fire.In reconstructing them:

• A)Human judgment will be important, but information technology will not.
• B)Information technology will be important, but human judgment will not.
• C)Both human judgment and information technology may be important.
• D)Neither human judgment nor information technology will be useful.

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Definitions:

Debt-To-Equity Ratio

An indicator of how a firm's assets are funded, reflecting the ratio of equity and debt in financing.

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets that are financed by shareholders' equity.

Net Profit Margin

A financial metric that measures the percentage of profit generated from revenue after all expenses have been subtracted.

Gross Margin

The difference between revenue and cost of goods sold, which shows the profitability of a company's core activities.