The Higher the ________ Ratio,the Lower the Degree of Protection

question 11

Multiple Choice

The higher the ________ ratio,the lower the degree of protection afforded creditors and the closer creditors' interest approaches the owner's interest.

• A)debt-to-net worth
• B)quick
• C)asset turnover
• D)current

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Definitions:

Corporation

A legal entity that is separate from its owners and shareholders, which can own assets, incur liabilities, and conduct business.

Government Entity

An organization operated by the government.

Authoritative Body

An organization or institution that sets standards or rules in a specific field, exerting control or influence.

Accounting Principles

The rules and guidelines that companies must follow when reporting financial data, ensuring consistency, reliability, and comparability of financial statements.