When a Decision Is Made Among a Number of Alternatives,the

question 15

Multiple Choice

When a decision is made among a number of alternatives,the benefit that is lost by choosing one alternative over another is called what?

• A) Realized cost.
• B) Opportunity cost.
• C) Conversion cost.
• D) Accrued cost.

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Definitions:

Liquidity

The ability of an entity to quickly convert its assets into cash or to pay off its current liabilities.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects money owed from its customers over a period.

Average Collection Period

The average amount of time that it takes for a business to receive payments owed by its clients in terms of receivables.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.