The Correct Order to Present Current Assets Is

question 16

Multiple Choice

The correct order to present current assets is

• A) cash, accounts receivable, prepaid items, inventories.
• B) inventories, receivables, prepaid items, cash.
• C) cash, inventories, accounts receivable, prepaid items.
• D) inventories, prepaid items, accounts receivable, cash.

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Definitions:

Accounts Receivable Approach

The accounts receivable approach is a method used in financial analysis to estimate the impact of credit sales and receivables on a company's cash flow and profitability.

Net Present Value

Net present value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Cost Of Switching

The cost of switching refers to the expenses and inconveniences a customer or company faces when changing products, services, or suppliers, including termination fees, setup costs, and time.

Incremental Cash Inflow

Additional cash earnings a company receives from undertaking certain actions, such as launching a new product or project.