Inherent Risk Is Often High for an Account Such As

question 60

Multiple Choice

Inherent risk is often high for an account such as:

• A) inventory.
• B) land.
• C) cash.
• D) notes payable.

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Definitions:

Key Components

Essential parts or elements that make up a larger system or process.

Acid-Test Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with quick assets.

Company's Liquidity

The ability of a company to meet its short-term financial obligations by quickly converting assets into cash without significant loss.

Gross Margin Ratio

A financial metric that measures a company's financial health by dividing its gross profit by net sales, indicating the percentage of sales revenue remaining after deducting the cost of goods sold.