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Which Factor Has Removed Most of the Practical Limitations Associated

question 23

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Which factor has removed most of the practical limitations associated with use of the perpetual inventory system?


Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Acid-Test Ratio

A financial metric that measures a company's ability to pay its short-term liabilities with its most liquid assets, excluding inventory.

Current Assets

Assets that a company expects to convert into cash, sell, or consume within one year or within the operating cycle, including cash, inventory, and accounts receivable.

Accounts Receivable Turnover

A financial ratio that measures how many times a company collects its average accounts receivable in a period.

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