A Common Measure of Liquidity Is

question 103

Multiple Choice

A common measure of liquidity is

• A)return on assets.
• B)receivables turnover.
• C)profit margin.
• D)debt to total assets.

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Definitions:

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet.

Credit

A financial agreement where a borrower receives something of value now and agrees to repay the lender at a later date, often with interest.

Equity Account

An account representing the owner's or shareholders' interest in a company, reflected in the capital stock, retained earnings, and contributed surplus on the balance sheet.

Unearned Revenue

Money received by a company for products or services yet to be delivered or performed, recorded as a liability on the balance sheet until earned.