Which of the Following Ratios Assesses the Ease with Which

question 30

Multiple Choice

Which of the following ratios assesses the ease with which an organization's assets can be converted into cash?

• A) Liquidity ratio
• B) Profitability ratio
• C) Debt ratio
• D) Operating ratio
• E) Coverage ratio

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Definitions:

Sales Adjusted

A correction made to sales figures to account for various factors such as returns, allowances, or discounts.

Cash Basis

A method of accounting that records transactions when cash is either received or paid.

Selling and Administrative Expense

Expenses related to the selling of products and the management of the business, not directly tied to production, including marketing, salaries of executives, and office supplies.

Adjusted

Modified or changed for a more accurate comparison or calculation, often in financial contexts.