Profits Which Are Not Taken in the Form of Money

question 74

Multiple Choice

Profits which are not taken in the form of money are known as:

• A) liabilities of newness.
• B) slack resources.
• C) takeoffs.
• D) current liabilities.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations using its current assets.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year's time, including cash, inventory, and receivables.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle.

Ratios

A quantitative relationship between two numbers, showing how many times one value contains or is contained within the other.