Which of the Following Statements Is False with Regard to the Debt

question 186

Multiple Choice

Which of the following statements is false with regard to the debt ratio?

• A)It is of use to both internal and external users of accounting information.
• B)A relatively high ratio is always desirable.
• C)The dividing line for a high and low ratio varies from industry to industry.
• D)Many factors such as the company's age,stability,profitability,and cash flow influence the determination of what would be interpreted as a high versus a low ratio.
• E)The ratio might be used to help determine if a company is capable of increasing its income by obtaining further debt.

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Definitions:

Writ Of Execution

A court order authorizing the enforcement of a judgment, typically involving the seizure or sale of the debtor's property.

Order Of Attachment

A court order directing the seizure of a debtor's property to secure satisfaction of a judgment.

Writ Of Garnishment

A legal order issued by a court that allows for the withholding of a person's assets or earnings for the payment of a debt.

Public Policy

Public policy represents the fundamental guidelines or principles that govern the actions and decisions of a government, reflecting the social and economic priorities of the society.