Liquidity Ratios Can Be Obtained from Information on the Balance

question 55

Multiple Choice

Liquidity ratios can be obtained from information on the Balance Sheet,while Activity Ratios require information obtained from the

• A)income statement,balance sheet and statement of cash flows.
• B)income statement only.
• C)income statement and balance sheet.
• D)balance sheet only.
• E)none of the above

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Definitions:

Conversion Costs

The costs incurred to convert raw materials into finished products, including direct labor and manufacturing overhead.

Weighted-Average Method

The weighted-average method is a cost accounting technique used to calculate inventory and cost of goods sold by assigning an average cost to each unit, based on the weight of those units in beginning inventory and purchases made.

Equivalent Units

In cost accounting, this is a metric that represents the work accomplished by unfinished units as if they were fully completed units.

Conversion Costs

Conversion costs are the expenses incurred to convert raw materials into finished goods, typically including labor and overhead costs.