One Aspect of Conventional Accounting Measures Which Is NOT Believed

question 34

Multiple Choice

One aspect of conventional accounting measures which is NOT believed to pose problems for measuring strategic performance is that:

• A) accounting measures are historical
• B) accrual-based accounting and cash flow modelling are too easily reconciled
• C) not all assets are depreciated
• D)debt and leasing/outsourcing policies vary

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Definitions:

Quick Ratio

A financial metric that measures a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory.

Current Liabilities

Short-term financial obligations due within one year or within the entity's operating cycle if longer.

Debt-Paying Ability

An indication of a company's financial strength, referring to its capacity to meet its debt obligations as they come due.

Solvency

The ability of a company or individual to meet long-term financial obligations, indicating financial health.