If Management Wishes to Determine the Average Degree of Delinquency

question 112

Multiple Choice

If management wishes to determine the average degree of delinquency of the charge customers,they could use the:

• A)rate of return on total assets.
• B)rate of return on common stockholders' equity.
• C)accounts receivable turnover.
• D)quick (acid test)ratio.

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Definitions:

Continuity Assumption

A fundamental accounting principle assuming that a business will continue to operate indefinitely, maintaining its financial and operational policies without the intention or necessity of liquidation.

Foreseeable Future

A term used in planning and forecasting to describe the time period over which future events can be reliably predicted.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and regulators.

Transactions

The act of conducting business such as buying, selling, or exchanging goods, services, or financial instruments, recorded in the financial records of an entity.