All of the Following Statements Regarding the Ratio of Liabilities

question 210

Multiple Choice

All of the following statements regarding the ratio of liabilities to stockholders' equity are true except

• A) a ratio of 1 indicates that liabilities equal stockholders' equity
• B) sole proprietorships can use this ratio but substitute total owner's equity for total stockholders' equity
• C) the higher this ratio, the better able a business is to withstand poor business conditions and pay creditors
• D) the lower this ratio, the better able a business is to withstand poor business conditions and pay creditors

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Definitions:

Verbal Order

An instruction for patient care communicated orally between healthcare professionals, often documented later in written form.

Routine Medication

Medication that is taken on a regular schedule to manage chronic conditions or maintain health.

Incident Report

A detailed account of an unexpected event that occurs in a healthcare setting, potentially compromising patient safety, to be used for learning and prevention of future incidents.

Unclear Wording

The use of language that lacks clarity and precision, making comprehension difficult.