Which of the Following Is Least Likely to Be a Possible

question 17

Multiple Choice

Which of the following is least likely to be a possible cause of book-to-physical differences in inventory quantities?

• A)Inventory cutoff errors.
• B)Misapplication of LIFO.
• C)Unreported scrap or spoilage.
• D)Theft.

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Definitions:

Acid-Test Ratio

A financial metric used to determine a company's short-term liquidity position, measuring its ability to cover short-term liabilities with its most liquid assets.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, often recorded as assets on the balance sheet.

Current Liabilities

Short-term financial obligations that are due to be paid within one year or within the normal operating cycle of a business.

Acid-Test Ratio

A liquidity ratio, also known as the quick ratio, that measures a company's ability to pay off its current liabilities with its quick assets (cash, marketable securities, and accounts receivable).