Which of the Following Metrics Is Affected When a Business

question 70

Multiple Choice

Which of the following metrics is affected when a business makes prepayment of rent? ​

• A) ​Profitability
• B) ​Leverage
• C) ​Liquidity
• D) ​Contingency

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Definitions:

Inventory Costing

This is a method used to value inventory, including methods like FIFO (First-In, First-Out), LIFO (Last-In, First-Out), and weighted average cost.

Direct Materials

Raw materials that can be directly traced to the production of a specific good or service, considered part of the product's cost.

Process Cost System

A method of accounting used for industries where production is continuous, allocating costs to products based on the processes they go through.

Identical Units

Units that are uniform in every aspect, including features, quality, and performance, typically used in manufacturing and inventory contexts.