Which of the Following Statements Is True

question 88

Multiple Choice

Which of the following statements is true?

• A)The inventory turnover ratio is an important solvency test for retail companies.
• B)Liquidity focuses on the ability of a company to pay their long- and short-term debts.
• C)Tests of profitability focus on measuring the adequacy of profit.
• D)The debt to equity ratio is a measure of liquidity.

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Definitions:

Clayton Act

A U.S. antitrust law enacted in 1914, aimed at promoting fair competition and preventing unfair business practices such as price discrimination, anti-competitive mergers, and exclusive dealing contracts.

Federal Trade Commission Act

A U.S. law established in 1914 to prevent unfair competition, fraudulent marketing, and monopolies, creating the Federal Trade Commission (FTC) to enforce these regulations.

Tax Incentives

Financial benefits provided by the government to encourage certain behaviors or investments, such as tax credits or deductions.

Americans with Disabilities Act

A civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life.