Which of the Following Ratios Is Most Useful in Evaluating

question 29

Multiple Choice

Which of the following ratios is most useful in evaluating liquidity?

• A)Return on assets.
• B)Return on equity.
• C)Debt to equity ratio.
• D)Current ratio.

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Definitions:

Equivalent Unit

A measure used in accounting to express the amount of work done by employees or the amount of goods produced in terms of fully completed units.

Process Costing

is a costing method used where production is continuous, assigning costs to units of product based on the processes they go through.

Conversion Costs

Costs related to transforming raw materials into finished goods, specifically including direct labor and manufacturing overhead expenses.

Equivalent Unit

A measure used in process costing that converts the work done on partial units into a number of fully completed units.