The _____ Shows Whether an Organization Can Pay Claims of Short-Term

question 19

Multiple Choice

The _____ shows whether an organization can pay claims of short-term creditors without selling inventory.

• A)quick ratio
• B)current ratio
• C)days sales outstanding ratio
• D)inventory turnover ratio
• E)profit ratio

---

Definitions:

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life.

Units-Of-Production Depreciation

A depreciation method where the expense is based on actual usage or production levels, rather than time.

Total Depreciable Cost

The total depreciable cost is the cost of a fixed asset minus its salvage value, representing the total amount that can be depreciated over the asset's useful life.

Total Asset Turnover

A financial ratio that measures a company's efficiency in using its assets to generate revenue.