Which of the Following Events Is Likely to Encourage a Company

question 68

Multiple Choice

Which of the following events is likely to encourage a company to raise its target debt ratio, other things held constant?

• A) An increase in the personal tax rate.
• B) An increase in the company's operating leverage.
• C) The Federal Reserve tightens interest rates in an effort to fight inflation.
• D) The company's stock price hits a new high.
• E) An increase in the corporate tax rate.

Recognize the accounting treatments for gains and losses under the equity method.

Calculate and understand the treatment of goodwill and other intangible assets in equity method investments.

Understand the recognition and measurement of deferred intra-entity gross profit.

Evaluate the reporting requirements for changes in accounting principle as they relate to the equity method.

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Definitions:

Deuterostomes

A superphylum of animals characterized by the blastopore developing into the anus during early embryo development.

Blastopore

The opening of the central cavity of an embryo in the early stage of development, which eventually develops into the digestive tract in some animals.

Coelom

The fluid-filled body cavity between the intestinal canal and the body wall in triploblastic animals, providing space for the development of internal organs.

Protostomes

A group of animals characterized by developing the mouth before the anus during embryonic development.