Use the Following Statements to Answer This Question

question 48

Multiple Choice

Use the following statements to answer this question:
I.The quick ratio is more conservative than the current ratio because it covers a smaller period of time.
II.The cost of goods sold figure in the inventory turnover ratio is not always reliable because of accounting differences used in measuring it.

• A)I and II are correct.
• B)I and II are incorrect.
• C)I is correct and II is incorrect.
• D)I is incorrect and II is correct.

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Definitions:

Seller's Warranties

Guarantees made by a seller regarding the condition, functionality, or quality of goods or services.

Liquidated Damages

Damages specified as a term of the contract, before a breach of contract occurs.

Breach of Contract

A violation of any of the agreed-upon terms and conditions of a binding contract.

Specific Performance

A legal remedy requiring a party to perform their part of the contract rather than provide monetary compensation for failing to meet their obligations.