The ________ Ratio Helps Determine the Ability of a Firm

question 39

Multiple Choice

The ________ ratio helps determine the ability of a firm to repay its short-term debts even if it has difficulty selling its inventory.

• A) acid-test
• B) cash flow
• C) diluted current asset
• D) required reserve

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Definitions:

Operating Departments

Units within an organization directly involved in producing goods or providing services, as opposed to administrative divisions.

Personnel Costs

Expenses related to the compensation of employees, including salaries, benefits, and taxes.

Information Technology

The use of computers, networks, and other physical devices to create, process, store, secure, and exchange all forms of electronic data.

Step-Down Method

An allocation technique used in cost accounting to assign overhead costs to various cost objects based on a hierarchical order.