In Terms of Liquidity, Inventory Is

question 72

Multiple Choice

In terms of liquidity, inventory is

• A)more liquid than cash.
• B)more liquid than accounts receivable.
• C)more liquid than prepaid expenses.
• D)less liquid than store equipment.

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Definitions:

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced, indicating the per unit fixed cost.

Fixed Costs

Costs that do not vary with the level of output, such as rent, salaries, and insurance premiums.

Cakes

Baked desserts typically made from ingredients like flour, sugar, and eggs.

Average Product

The output per unit of input, calculated by dividing total product by the number of units of input, used to measure productivity.