Which of the Following Statements Is True

question 64

Multiple Choice

Which of the following statements is true?

• A) A larger fixed asset turnover ratio is associated with firms that are more labor intensive and require smaller fixed asset investments.
• B) The fixed asset ratio cannot be compared across time for an individual company.
• C) A smaller fixed asset turnover ratio is associated with firms that are more labor intensive and require smaller fixed asset investments.
• D) The fixed asset ratio is not useful for comparing different companies.

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Definitions:

Ethical Conduct

Behavior that is consistent with principles of moral and ethical standards, which guide decision-making and actions.

External User

External User refers to individuals or entities outside of a company who use its financial statements to make decisions, such as investors, creditors, and regulatory agencies.

Federal Government

The national government of a federated state, which holds the authority to govern the issues that affect the entire country.

Financial Accounting Standards Board

An independent organization responsible for establishing and improving financial accounting and reporting standards in the United States.