When Calculating Accounts Payable Turnover,if There Is Not a Material

question 38

Multiple Choice

When calculating accounts payable turnover,if there is not a material difference between the company's beginning inventory and ending inventory,then the accounts payable turnover will be ________ whether purchases or cost of goods sold are used.

• A)similar
• B)unavailable
• C)drastically different
• D)noncomparable

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Definitions:

Margin of Safety

The difference between actual sales and break-even sales, measuring the risk of not reaching the break-even point.

Budgeted Income Statement

A financial statement forecasting the revenues, expenses, and net income for a specific period, based on proposed budgets and assumptions.

Contribution Margin Ratio

A financial metric that measures the proportion of sales revenue that exceeds variable costs, indicating how much contributes to covering fixed costs and generating profit.

Sales

The total amount of revenue a company generates from the sale of goods or services before any expenses are deducted.