Expenses Can Result from

question 169

Multiple Choice

Expenses can result from

• A) paying dividends
• B) consuming services
• C) using up liabilities
• D) all of these

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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.