Which of the Following Events Is Not a Past Event

question 1

Multiple Choice

Which of the following events is not a past event generating a liability?

• A) Purchase of raw materials on credit
• B) Receipt of a bank loan
• C) Acquisition of goods paid on delivery
• D) Receipt of prepayment for services

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Definitions:

Receivable Turnover

A financial ratio indicating how quickly a company collects on its accounts receivable, calculated as sales divided by the average accounts receivable.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period of time, indicating the efficiency of inventory management.

Return On Assets

Return on assets (ROA) is a financial ratio that indicates the profitability of a company relative to its total assets, measuring how efficiently a company uses its assets to generate profit.

Total Debt

The sum of all financial obligations or liabilities held by a business or individual, including short-term and long-term debt.