Which of the Following Ratios Indicates How Rapidly the Firm's

question 57

Multiple Choice

Which of the following ratios indicates how rapidly the firm's credit accounts are being collected?

• A) Debt ratio
• B) Gross profit margin
• C) Accounts receivable turnover ratio
• D) Fixed asset turnover

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Definitions:

Trial Balance

A financial report that lists the balances of all ledgers in an account to check the mathematical accuracy of bookkeeping entries.

Cash Salary

Compensation for services rendered by an employee or contractor that is paid in the form of immediately available funds rather than non-cash benefits.

Accounts Receivable

Funds owed to a company by customers who have purchased goods or services on credit.

Office Supplies

Items used in offices on a regular basis for the purpose of carrying out tasks; includes items like pens, paper, and staplers.