Lower the Debt Equity ratio
A. Lower the protection to creditors
B. Higher the protection to creditors
C. It does not affect the creditors
D. None of the above
Answer: Option B
Solution(By Examveda Team)
Lower the Debt Equity ratio higher is the protection to creditors. Creditors usually like a low debt to equity ratio because a low ratio (less than 1) is the indication of greater protection to their money.This Question Belongs to Commerce >> Accounting
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Comments ( 3 )
Accounting provides information on
A. Cost and income for managers
B. Company's tax liability for a particular year
C. Financial conditions of an institutions
D. All of the above
The long term assets that have no physical existence but are rights that have value is known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
Patents, Copyrights and Trademarks are
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
It's answer must b "it doesn't affect creditors" because creditors represent short term liability not d long term and debt equity ratios represent long term solvency of d firm.
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