The Ratio That Tells Whether the Entity Can Pay All

question 79

Multiple Choice

The ratio that tells whether the entity can pay all its current liabilities if they come due immediately is the:

• A)acid-test ratio.
• B)accounts receivable turnover.
• C)inventory turnover.
• D)earnings per share.

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Definitions:

Industrial Revolution

A period of major industrialization that took place during the late 1700s and early 1800s, transforming agriculture-based societies into industrialized and urban ones.

Raw Materials

Basic materials that are used in the production of goods, finished products, or intermediate materials that are feedstock for future finished products.

Cheap Labor

The employment of workers at wages that are considered lower than the norm for their industry or region.

Regionalization

Regionalization is the division of the world into different and often competing economic, political, and cultural areas.