The Description of the Relation Between a Company's Assets, Liabilities

question 237

Multiple Choice

The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:

• A) Income statement equation.
• B) Accounting equation.
• C) Business equation.
• D) Return on equity ratio.
• E) Net income.

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Definitions:

Lot-For-Lot Ordering

A inventory management strategy where exactly the quantity needed for production or demand is ordered, minimizing the inventory holding costs.

MRP Plan

Material Requirements Planning; a system for calculating materials and scheduling production to meet demand.

Gross Requirements

The total demand for an item, inclusive of direct and indirect requirements, before any adjustments for on-hand inventory or scheduled receipts.

Lot-For-Lot

A production strategy where the quantity to be produced is based on the exact demand, avoiding excess production.