Which of the Following Ratios and Rates That Measure Debt-Paying

question 110

Multiple Choice

Which of the following ratios and rates that measure debt-paying ability focuses on the long-term position of a company?

• A)Quick ratio
• B)Inventory turnover
• C)Current ratio
• D)Debt ratio

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Definitions:

Liabilities

Financial obligations or debts that a company owes to external parties or entities.

Accounts Receivable

Money owed to a company by its clients or customers for goods or services delivered but not yet paid for.

Accounts Payable

The amounts owed by a business to its suppliers or vendors for goods or services received that have not yet been paid for.

Unearned Revenue

Money received by an individual or company for a service or product that has yet to be provided or delivered.