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Given What You Know About the Differences in Conservatism Between

Question 33

Multiple Choice

Given what you know about the differences in conservatism between the U.S. and U.K., which of the following statements is most accurate?

A) return on equity and the debt/equity ratio would usually be lower under U.K. GAAP than it would be under U.S. GAAP.
B) return on equity would usually be higher and the debt/equity ratio lower under U.K. GAAP than under U.S. GAAP.
C) return on equity would usually be lower and the debt/equity ratio higher under U.K. GAAP than under U.S. GAAP.
D) return on equity and the debt/equity ratio would usually be higher under U.K. GAAP than under U.S. GAAP.

Correct Answer: