Maridell’s Fashions has a debt that has been properly reported as a long-term liabilityup to the present year (2018). Some of this debt comes due in 2018. If Maridell’s Fashionscontinues to report the current position as a long-term liability, the effect will be toa. understate the debt ratio.b. understate total liabilities.c. overstate the current ratio.d. overstate net income.
Maridell’s Fashions has a debt that has been properly reported as a long-term liabilityup to the present year (2018). Some of this debt comes due in 2018. If Maridell’s Fashionscontinues to report the current position as a long-term liability, the effect will be toa. understate the debt ratio.b. understate total liabilities.c. overstate the current ratio.d. overstate net income.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Maridell’s Fashions has a debt that has been properly reported as a long-term liability
up to the present year (2018). Some of this debt comes due in 2018. If Maridell’s Fashions
continues to report the current position as a long-term liability, the effect will be to
a. understate the debt ratio.
b. understate total liabilities.
c. overstate the current ratio.
d. overstate net income.
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