The Higher the Fixed Asset Turnover, the

question 88

Multiple Choice

The higher the fixed asset turnover, the

• A) less efficiently a company is using its fixed assets in generating sales
• B) more efficiently a company is using its fixed assets in generating sales
• C) more efficiently a company is using its current assets in generating sales
• D) more efficiently a company is using its intangible assets in generating sales

---

Definitions:

Prepaid Insurance

A current asset account that represents the amount of insurance premiums paid in advance for coverage extending beyond the current accounting period.

Accounts Payable

Amounts a company owes because it purchased goods or services on credit from a supplier or vendor.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered but not yet paid for.

Inventory

Refers to the goods and materials that a business holds for the ultimate goal of resale.