A Common Measure of Liquidity Is

question 8

Multiple Choice

A common measure of liquidity is

• A) Return on assets.
• B) Accounts receivable turnover.
• C) Profit margin.
• D) Debt to equity.

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Definitions:

Ending Inventory

The worth of products on hand for sale at the conclusion of an accounting cycle, determined by adding the starting inventory to acquisitions and then subtracting the cost of goods sold.

Merchandise Inventory

Goods or products that a company holds for the purpose of sale to customers in the ordinary course of business.

Capital

Financial assets or resources owned by an individual or organization, particularly those used to generate income or investment.

Adjusting Journal Entries

Journal entries that are needed in order to update specific ledger accounts to reflect correct balances at the end of an accounting period.