Which of the Following Ratios Measure How Efficiently a Firm

question 124

Multiple Choice

Which of the following ratios measure how efficiently a firm uses its assets, as well as how efficiently the firm manages its accounts payable?

• A)Asset management
• B)Cash
• C)Internal-growth
• D)Quick or acid test

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Definitions:

Estimated Returns Inventory

A current asset account for the estimated amount of merchandise that will be returned by customers.

Customer Refunds Payable

Liabilities owed to customers for products or services that were sold but later returned or found unacceptable.

Perpetual Inventory

An inventory tracking system that records the sale or purchase of inventory immediately through the use of computerized systems.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, carried over from the end of the previous period.