Which of the Following Items Is a Measure of a Company's

question 157

Multiple Choice

Which of the following items is a measure of a company's ability to collect receivables?

• A) inventory turnover ratio
• B) current ratio
• C) days' sales in receivables
• D) account receivable balance

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Definitions:

Power Cost

The expense associated with the consumption of electrical energy by a company's operations.

Efficiency Variances

These variances measure the difference between the actual input used to produce a good or service and the standard input expected to be used, showing how efficiently resources are utilized.

Rate Variances

Differences between actual rates paid for inputs and the standard expected rates, often analyzed in cost accounting for labor, materials, and overhead costs.

Variable Overhead

Costs that vary with production volume, such as utilities for a factory, which do not remain constant as production levels change.