Which of the Following Will Not Increase Your Liquidity Ratio

question 16

Multiple Choice

Which of the following will not increase your liquidity ratio?

• A)Purchasing a stereo on credit
• B)Paying off a credit card
• C)Selling stock for a gain
• D)More data needed

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Definitions:

Manufacturing Margin

The difference between the sales revenue of manufactured products and their production costs (excluding indirect costs).

Variable Costing

A costing method that includes only variable production costs (direct labor, direct materials, and variable manufacturing overhead) in product costs.

Absorption Costing

Accounting method that includes all manufacturing costs (direct costs, variable and fixed overhead) in the cost of a product.

Variable Costing

A method of costing that includes only variable production costs in product costs, treating fixed manufacturing overhead as a period cost to be charged against revenue in the period incurred.