Understanding Turnover in Accounting and Investments
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Questions and Answers

What does turnover measure in accounting?

  • The total dollar amount of unpaid customer invoices
  • The total revenues of a company
  • How quickly a business conducts its operations (correct)
  • The percentage of a portfolio that is sold in a particular month or year
  • What is the purpose of calculating turnover ratios?

  • To assess the total dollar amount of unpaid customer invoices
  • To understand the percentage of a portfolio sold by a broker
  • To determine the total revenues of a company
  • To measure the efficiency of business operations (correct)
  • Which assets are commonly assessed using turnover ratios?

  • Investment portfolios and cash reserves
  • Total revenues and expenses
  • Accounts receivable and inventory (correct)
  • Fixed assets and liabilities
  • In the investment industry, what does a quick turnover rate generate?

    <p>More commissions for trades placed by a broker</p> Signup and view all the answers

    What does accounts receivable represent?

    <p>The total dollar amount of unpaid customer invoices at any point in time.</p> Signup and view all the answers

    Turnover is only used to understand how quickly a company collects cash from accounts receivable.

    <p>False</p> Signup and view all the answers

    Turnover can be a synonym for a company’s total revenues.

    <p>True</p> Signup and view all the answers

    Turnover ratios are used by fundamental analysts and investors to determine if a company is deemed a good investment.

    <p>True</p> Signup and view all the answers

    Accounts receivable turnover represents the total dollar amount of unpaid customer invoices at any point in time.

    <p>True</p> Signup and view all the answers

    Companies cannot better assess the efficiency of their operations by looking at a range of turnover ratios.

    <p>False</p> Signup and view all the answers

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