The Financial Ratio That Indicates How Efficiently the Managers of the Organization

question 51

Multiple Choice

The financial ratio that indicates how efficiently the managers of the organization are collecting the revenue due to the organization from the sale of its products or services is the _____________ ratio.

• A) debt-to-assets
• B) quick
• C) current
• D) days sales outstanding
• E) profit

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Definitions:

Periodic Inventory System

An inventory system in which the inventory count and cost of goods sold are determined at set intervals, such as monthly or annually.

Purchase Returns and Allowances

Transactions where buyers return defective or unsatisfactory products to the seller, who may offer a refund or price reduction.

Freight-In

The cost associated with transporting goods to a warehouse or production facility, considered part of the inventory cost.

Merchandise Purchased

Expenses related to the acquisition of goods for resale in the ordinary course of business.