Which of These Is Not Directly Affected by Purchases and Payments

question 5

Multiple Choice

Which of these is not directly affected by purchases and payments transactions?

• A) plant assets.
• B) work-in-process inventory.
• C) accounts payable.
• D) prepaid expenses.

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Definitions:

Operating Effectiveness

The efficiency with which a company utilizes its resources to produce goods or services and operates its business processes.

Horizontal Analysis

Horizontal analysis is a financial analysis technique that shows changes in the amounts of corresponding financial statement items over a period of time, aiding in the assessment of financial performance and trends.

Vertical Analysis

A financial analysis method that expresses each item in a financial statement as a percentage of a base amount, facilitating period-to-period and company-to-company comparisons.

Ratio Analysis

A technique for evaluating financial statements that expresses the relationship between selected financial statement data.