If a Firm Capitalizes a Lease Instead of Treating the Lease

question 30

Multiple Choice

If a firm capitalizes a lease instead of treating the lease as an operating lease, the effect on the current ratio and the debt-to-equity ratio will be to: $$\begin{array} { | l | l | l | } \hline & \text { Current Ratio } & \text { Debt-to-Equity Ratio } \\\hline \text { A) } & \text { Increase } & \text { Increase } \\\hline \text { B) } & \text { No effect } & \text { Increase } \\\hline \text { C) } & \text { No effect } & \text { Decrease } \\\hline \text { D) } & \text { Decrease } & \text { Increase } \\\hline\end{array}$$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Cultural Proficiency

The level of knowledge, awareness, and skills needed to function effectively and respectfully in culturally diverse environments.

Cultural Pre-competence

Describes the awareness and initial efforts of individuals or organizations to understand and respect different cultures, with the aim to advance cultural competence.

Basic Cultural Competence

The fundamental ability of individuals and organizations to understand and honor the cultural beliefs, languages, interpersonal styles, and behaviors of individuals and groups from different cultural backgrounds.

Cultural Proficiency

The level of knowledge-based skills and understanding of cultural differences and similarities within, among, and between groups required for effective work in a pluralistic environment.