In a Firm That Uses Special Journals,the Return of Damaged

question 8

Multiple Choice

In a firm that uses special journals,the return of damaged merchandise to a supplier and receipt of a credit memorandum is recorded in the

• A) cash payments journal.
• B) cash receipts journal.
• C) purchases journal.
• D) general journal.

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Definitions:

Inventory Turnover

A proportion indicating the frequency with which a business has sold its inventory and replenished it within a specific timeframe.

Current Liabilities

Financial obligations of a business that are due and payable within one year, including accounts payable, short-term debt, and other short-term obligations.

Quick Ratio

The quick ratio, or acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets.

Current Ratio

A financial metric used to evaluate a company's ability to pay short-term obligations, calculated by dividing current assets by current liabilities.