Tiny Is an Accountant

question 27

Multiple Choice

Tiny is an accountant. Tiny's violation of generally accepted accounting principles and generally accepted auditing standards

• A) does not indicate that Tiny was negligent.
• B) is prima facie evidence that Tiny was negligent.
• C) precludes Tiny from raising any defense against a negligence claim.
• D) will never subject Tiny to liability.

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Definitions:

Financial Leverage

The use of borrowed money (debt) to amplify the potential return of an investment or project.

Debt/Equity Ratio

The indicator that compares the role of debt and equity in financing company assets.

Financial Leverage

The use of borrowed money to increase the potential return of an investment, which also increases the risk of loss.