Which of the Following Statements About the Quality of Earnings

Multiple Choice

Which of the following statements about the quality of earnings ratio is true?

A) When sales are growing,receivables and inventory normally increase faster than trade payable so the ratio increases.
B) Seasonal variations in sales have no impact on the quality of income ratio.
C) Failure to accrue appropriate expenses will inflate profit and reduce the quality of income ratio.
D) Failure to accrue appropriate expenses will inflate net profit and increase the quality of income ratio.