Which One of the Following Ratios Would Not Likely Be

question 19

Multiple Choice

Which one of the following ratios would not likely be used by a short-term creditor in evaluating whether to sell on credit to a company?

• A) Current ratio
• B) Inventory turnover
• C) Asset turnover
• D) Accounts receivable turnover

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Definitions:

Adjusting Entry

A record added in the books at the closing of an accounting cycle to note any unrecorded earnings or expenditures during that time.

Rent Revenue

Income received from leasing out properties or spaces to tenants.

Liability-Revenue Relationship

The association between a company's liabilities and its ability to generate income, impacting financial performance.

Unearned Revenue

Money received by a company for goods or services yet to be delivered or performed.