If the Wages of a Dentist Increase

question 256

Multiple Choice

If the wages of a dentist increase,

• A)so does her opportunity cost of leisure.
• B)her hours of labor supplied may increase.
• C)her hours of labor supplied may decrease.
• D)All of the above are correct.

Understand various inventory costing methods and their effects on financial statements.

Analyze the impact of inventory errors on financial reporting.

Calculate inventory balances, cost of goods sold, and inventory turnover metrics.

Determine the effects of inventory management decisions on business liquidity and profitability.

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Definitions:

Quick Ratio

A liquidity measure that indicates a company's ability to pay its current liabilities without needing to sell inventory, calculated as (current assets - inventory) / current liabilities.

Liquidity Measures

Financial metrics used to determine how quickly a company can turn its assets into cash to meet short-term obligations. Common measures include current ratio and quick ratio.

Current Ratio

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Quick Ratio

A liquidity measure that indicates a company's ability to cover its short-term liabilities with its most liquid assets.