Scandals Involving Enron and WorldCom Drew Heightened Attention to the Possibility

question 70

Multiple Choice

Scandals involving Enron and WorldCom drew heightened attention to the possibility that financial statements might be misreported to portray a favourable impression of a company's financial results.Which of the following false impressions could be suggested by the ratio indicated?

• A)Greater control of expenses might be suggested by the net profit margin ratio.
• B)Greater efficiency in asset use might be suggested by the debt-to-assets ratio.
• C)Greater control of expenses might be suggested by the debt-to-assets ratio.
• D)Less financing risk might be suggested by the asset turnover ratio.

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Definitions:

Monocular Cues

Refers to the visual information that allows for depth perception and the sense of three-dimensionality from a single eye.

Binocular Cues

Visual information taken in by two eyes that enable a sense of depth perception, such as stereopsis, convergence, and parallax.

3D Movies

Films that create the illusion of depth perception, typically using special glasses, to enhance the viewing experience.

Principle

A fundamental truth or proposition that serves as the foundation for a system of belief, behavior, or reasoning.