Which of the Following Is Not a Reason Why a Company

question 102

Multiple Choice

Which of the following is not a reason why a company might prefer to report a liability as long-term rather than current?

• A)It may cause the firm to appear less risky to investors and creditors.
• B)It may increase interest rates on borrowing.
• C)It may cause the company to appear more stable commanding a higher stock price for new stock listings.
• D)It may reduce interest rates on borrowing.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, used to compare actual performance against what should have occurred at the actual level of activity.

Static Budget

A fixed budget that does not change with the level of activity or production volume, often used for planning purposes.

Level Of Activity

A measurement of the volume of production or operations within a business, which can affect various costs and efficiency metrics.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels.