In Order to Be Reported,liabilities Must

question 139

Multiple Choice

In order to be reported,liabilities must:

• A)Be certain.
• B)Sometimes be estimated.
• C)Be for a specific amount.
• D)Always have a definite date for payment.
• E)Involve an outflow of cash.

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Definitions:

Fixed Asset Requirements

The necessary investments in long-term assets like property, plant, and equipment that a business needs to carry out its operations.

Return On Assets

A financial ratio indicating how profitable a company is relative to its total assets, calculated by dividing net income by total assets.

Operating Cycle

The duration between a company's purchase of inventory and the collection of accounts receivable generated from sales of that inventory.

Accounts Receivable Period

The accounts receivable period measures the average number of days it takes for a company to collect payments after a sale has been made, indicating the efficiency of its credit and collection policies.