Given a Choice,most Companies Would Prefer to Report a Liability

question 55

Multiple Choice

Given a choice,most companies would prefer to report a liability as long-term rather than current because:

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

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Definitions:

Carrots

Commonly known as a root vegetable, orange in color, and widely used in cooking for its sweet flavor and nutritional value.

Peas

A small green seed or the seed-pod of the Pisum sativum, commonly consumed as a vegetable.

Defend

To protect or uphold against challenge or criticism.

Comparative Advantage

The ability of an individual or country to produce a good or service at a lower opportunity cost than others.