Which of the following statements about the quality of earnings ratio is true? Multiple Choice Failure to accrue appropriate expenses will inflate net earnings and reduce the quality of earnings ratio. Failure to accrue appropriate expenses will inflate net earnings and increase the quality of earnings ratio. When sales are growing, receivables and inventory normally increase faster than payables so the ratio increases. Seasonal variations in sales have no impact on the quality of earnings ratio.
Which of the following statements about the quality of earnings ratio is true? Multiple Choice Failure to accrue appropriate expenses will inflate net earnings and reduce the quality of earnings ratio. Failure to accrue appropriate expenses will inflate net earnings and increase the quality of earnings ratio. When sales are growing, receivables and inventory normally increase faster than payables so the ratio increases. Seasonal variations in sales have no impact on the quality of earnings ratio.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 15DQ: How would reported income differ if LIFO rather than FIFO were used when purchase prices are rising?...
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