Activity Drivers Should Be Classified as Either Unit-Level or Nonunit-Level

question 24

True/False

Activity drivers should be classified as either unit-level or nonunit-level.

---

Definitions:

Liquidity

The ability to pay current obligations.

Liabilities

Financial obligations or debts that a company owes to external parties.

Assets

Assets that a company possesses or has rights to, which are anticipated to bring in economic gains or advantages in the future.

Operating Cycle

The period it takes for a business to buy inventory, sell products or services, and collect cash from sales.