Which of the Following Statements Is Most Consistent with Efficient

question 98

Multiple Choice

Which of the following statements is most consistent with efficient inventory management? The firm has a

• A) low incidence of production schedule disruptions.
• B) below average total assets turnover ratio.
• C) relatively high current ratio.
• D) relatively low DSO.
• E) below average inventory turnover ratio.

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Definitions:

Unearned Revenues

Income received by a company for goods or services that have yet to be provided, recorded as a liability on the balance sheet.

Prepaid Expenses

Costs that are paid in advance for goods or services, which are recognized as expenses over time as the benefits are received.

Employer Payroll Taxes

Employer payroll taxes are taxes that an employer is required to pay on behalf of their employees, including Social Security and Medicare taxes in the United States.

FICA Taxes

Taxes imposed on both employees and employers to fund Social Security and Medicare, based on a percentage of payroll.