All of the Following Are Considered by Analysts When Assessing

question 44

Multiple Choice

All of the following are considered by analysts when assessing the quality of accounting except:

• A) Price variation and the speed at which inventory turns over
• B) Any liquidation of FIFO inventory layers
• C) Any physical deterioration or obsolescence of inventory
• D) The inventory cost-flow assumption chosen by management

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Definitions:

ROI

Return on Investment; a performance measure used to evaluate the efficiency or profitability of an investment relative to its cost.

Operating Assets

Assets that are used for the day-to-day functioning of a business and can include cash, inventory, and buildings.

Direct Fixed Costs

Costs that are constant for a certain level of production or period but are directly tied to the production process.

Profit Center Manager

A manager responsible for overseeing a business segment or department that is judged on its ability to generate profit.