Which of the Following Statements About the Quality of Earnings

question 7

Multiple Choice

Which of the following statements about the quality of earnings ratio is false?

• A)An increase in operating assets and a decrease in liabilities will reduce operating cash flows,thereby reducing the ratio.
• B)Seasonal variations in sales and purchases of inventory can cause wide deviations in the quality of earnings ratio.
• C)When sales are growing,receivables and inventory normally increase at a faster rate than trade payables often causing operating cash flows to be less than profit.
• D)Seasonal variations in sales have no impact on the quality of earnings ratio.

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Definitions:

Environmentalism

A social and political movement that seeks to protect and improve the health of the environment through advocacy for policies reducing negative human impact.

Communication

The process of exchanging information, ideas, thoughts, and feelings through speaking, writing, or other mediums.

Environmental Pricing Strategy

Pricing methods that incorporate environmental costs, encouraging sustainable consumer behavior and product design.

Corporate Accountability

The responsibility of corporations to be answerable for their actions and decisions, particularly regarding their impact on society and the environment.