Ratios That Test Liquidity Include All of the Following EXCEPT

question 85

Multiple Choice

Ratios that test liquidity include all of the following EXCEPT:

• A)acid-test ratio.
• B)current ratio.
• C)return on assets.
• D)inventory turnover.

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Definitions:

Accounts

Financial records of an entity that detail transactions and can be used to prepare financial statements.

Loss Carry-Forward

A tax provision allowing companies to use their current year's net operating losses to reduce taxable income in future years.

Capital Losses

Financial losses incurred when the selling price of an asset is less than the purchase price.

Capital Gains

The profit from the sale of an asset or investment when the selling price exceeds its purchase price.