The Ratio That Is Computed by Dividing the Difference Between

question 55

Multiple Choice

The ratio that is computed by dividing the difference between current assets and inventory by current liabilities is the ________ ratio.

• A)inventory turnover
• B)quick
• C)current
• D)debt-to-assets

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Definitions:

Liability Account

An account used in accounting to keep track of obligations or debts that a company owes to others, representing claims against the company's assets by external parties.

Stock Option Plans

Programs established by companies to give employees the right to purchase a specific number of the company's shares at a fixed price for a certain period of time.

Stock Appreciation Rights

A type of incentive or compensation mechanism provided to employees that gives the right to receive a bonus equivalent to the increase in the company’s stock price over a set period.

Compensatory

Refers to something intended to recompense or make up for a loss, injury, or inconvenience.