Listed Below Are Five Terms Followed by a List of Phrases

question 156

Multiple Choice

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term.
-Long-term solvency

• A)Also know as the quick ratio.
• B)Current assets divided by current liabilities.
• C)Refers to riskiness of a company with regard to the amount of liabilities in its capital structure.
• D)Relates to the amount of time before an asset is converted to cash or a liability is paid.
• E)If four to one, 80% of assets are debt-financed.

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Definitions:

Favorable Variances

Variances that occur when actual costs are less than standard or budgeted costs, or actual revenues exceed expectations, benefiting the company's financial performance.

Unfavorable Variances

Situations where actual costs are higher than planned or budgeted costs, or actual revenue is lower than expected.

Management By Exception

A management strategy where only significant deviations from planned results are brought to the attention of management, focusing efforts on areas that are not performing as expected.

Standard Costs

Preset costs established for the manufacture of a product, including direct materials, direct labor, and overhead expenses, against which actual costs are compared.