Which Statement Concerning Liabilities Is Incorrect

question 19

Multiple Choice

Which statement concerning liabilities is incorrect?

• A) The absolute value of liquidity ratios is usually more important than their trend over time.
• B) Borrowing to finance assets provides the potential for greater returns for owners but also means greater risk.
• C) A difference between accounts payable and bills payable is that the liability created with bills payable is evidenced by a bills payable or a promissory note.
• D) Leverage is the use of borrowed funds in an attempt to earn a return greater than the interest paid on the borrowings.

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Definitions:

Price

The overall sacrifice a consumer is willing to make—money, time, energy—to acquire a specific product or service.

Geodemographic Segmentation

The grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristics.

Ethnic Food Aisle

A section within grocery stores dedicated to foods and ingredients associated with various ethnic or cultural cuisines.

Suburban

Pertaining to or characteristic of areas on the outskirts of a city, often residential in nature and less densely populated than urban centers.