Match the Term with Its Definition

question 66

Multiple Choice

Match the term with its definition.
-A measure of how well a firm is controlling its cost of goods sold and operating expenses relative to sales, determined by dividing operating profits by sales

• A)accrual-basis accounting
• B)cash
• C)cash-basis accounting
• D)depreciable assets
• E)depreciation expense
• F)financial statements
• G)inventory
• H)liquidity
• I)operating profit margin
• J)return on assets
• K)return on equity

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Definitions:

Variable Departmental Costs

Costs that vary directly with the level of output or activity within a specific department of a company.

Incremental Profit

The additional profit derived from making changes to the business operations, such as increasing production or sales.

Cash Payback Period

The duration of time it takes for an investment to generate enough cash flow to recover its initial cost.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenues, indicating profitability.