All of the following statements regarding the ratio of liabilities to owner's equity are true except
a. A ratio of 1 indicates that liabilities equal owner's equity.
b. Corporations can use this ratio but substitute total stockholders' equity for total owner's equity.
c. The higher this ratio, the better able a business is to withstand poor business conditions and pay creditors.
d. The lower this ratio, the better able a business is to withstand poor business conditions and pay creditors.
Question 2
The assets section of the balance sheet normally presents assets in
a. alphabetical order
b. the order of largest to smallest dollar amounts
c. the order in which they will be converted into cash or used in operations
d. the order of smallest to largest dollar amounts
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