Which Is a Liquidity Activity Ratio

question 63

Multiple Choice

Which is a liquidity activity ratio?

• A) profit margin
• B) inventory turnover
• C) return on assets
• D) times interest earned

Learn to compute variable and fixed factory overhead variances, including controllable, volume, and total cost variances.

Grasp the process of standard costing, including setting standards and analyzing variances.

Develop the ability to prepare basic journal entries for variances and standard cost transactions.

Acquire the skill to prepare a budget for factory overhead costs at different levels of capacity.

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Definitions:

Net Working Capital

The difference between a company’s current assets and current liabilities, indicating the liquidity of the business.

Statement of Comprehensive Income

A financial report detailing all equity adjustments for a period, excluding those changes stemming from owner investments and payouts to owners.

Carrying Value

The carrying value, or book value, is the value of an asset as recorded on the balance sheet, considering factors like depreciation and amortization.

Recoverable Amount

The higher of an asset's fair value less costs to sell and its value in use, indicating the maximum amount that can be recovered from an asset through its use or sale.