All of the Following Ratios Are Generally Used to Assess

question 7

Multiple Choice

All of the following ratios are generally used to assess a firm's liquidity except:

• A)quick ratio
• B)current ratio
• C)asset turnover ratio
• D)cash flow per share

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Definitions:

Sales Discounts

Reductions in the price of goods or services offered to customers to prompt early payment or bulk purchases.

Sales Returns

Goods returned by the buyer to the seller for a refund or credit, often due to issues like defects or dissatisfaction.

Adjusting Entries

Journal entries made in accounting at the end of a reporting period to allocate income and expenditures to the period in which they actually occurred.

Periodic Inventory

A periodic inventory system is an accounting method where inventory levels and cost of goods sold are updated in the ledger at the end of an accounting period, rather than tracking each sale or purchase individually.