Which of the following factors would most likely be present if a company increases its dividend
payout ratio significantly?
A) A quick ratio that is significantly below the industry average
B) A high debt/equity ratio (i.e., use of a large amount of financial leverage)
C) Current shareholders cannot participate in a new offering and desire to maintain ownership
control.
D) The variability of expected future earnings decreases.
D
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When accounting for a long-term construction contract for which revenue is recognized over time according to the percentage of completion, gross profit is recognized in any year is debited to:
A) Construction in progress. B) Billings on construction contract C) Deferred income D) Accounts receivable
A buffer is an introductory sentence or paragraph that leads up to and softens the bad news
Indicate whether the statement is true or false.