Industries differ greatly in terms of the percentage of sales made on credit.This means some measures of liquidity are less relevant to companies in some industries than in others.

Question

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This statement is true. Industries that have a high percentage of sales made on credit may be more concerned with measuring their accounts receivable turnover ratio and days sales outstanding, while industries that operate primarily on a cash basis may not place as much importance on these measures of liquidity.

Industries Differ Greatly in Terms of the Percentage of Sales