Which of the Following Ratios Would Be of Primary Importance

question 55

Multiple Choice

Which of the following ratios would be of primary importance to a manager in evaluating the success of a computerized collection process?

• A)Accounts receivable turnover
• B)Account payable turnover
• C)Quick ratio
• D)Return of equity

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Definitions:

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials, labor, and overhead.

Lower Of Cost

The accounting principle that dictates inventory items are recorded at the lower of either their cost or market value if the market value is less.

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or disposal, often used to evaluate inventory or accounts receivable.

Inventory Cost Methods

Inventory cost methods are accounting strategies for valuing inventory, such as FIFO (First In, First Out), LIFO (Last In, First Out), and average cost method.