Match these terms to their correct definition.
-Length of time required to collect the receivable from a credit sale.
A)Accounts receivable turnover ratio
B)Cash ratio
C)Gross profit percentage
D)Inventory turnover ratio
E)Net profit margin percentage
F)Operating margin percentage
G)Quick ratio
H)Total payout ratio

Question

Quizplus · Accepted Answer

The length of time required to collect the receivable from a credit sale is measured by the accounts receivable turnover ratio.

Answer: G
 The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets.

Answer: D
 The inventory turnover ratio measures how quickly a company is able to sell its inventory and is an indicator of a company's efficiency in managing its inventory.

Note: The other terms listed are also financial ratios that measure different aspects of a company's performance.

Match These Terms to Their Correct Definition