A High Quality of Earnings Is Indicated By

question 57

Multiple Choice

A high quality of earnings is indicated by:

• A)Earnings derived largely from newly introduced products.
• B)Declaration of both cash and stock dividends.
• C)Use of the FIFO method of inventory during sustained inflation.
• D)A history of increasing earnings and conservative accounting methods.

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Definitions:

Article 8

Typically references the right to respect for private and family life, home and correspondence under the European Convention on Human Rights.

Debenture

A type of long-term debt instrument that is not secured by physical assets or collateral.

Unsecured Creditor

A creditor who has extended credit without securing collateral and thus stands at a higher risk in case of the debtor's bankruptcy.

Secured Bond

A type of bond backed by collateral, providing the bondholder with a claim on specific assets if the issuer defaults.