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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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