Match the Terms with the Definitions

question 85

Multiple Choice

Match the terms with the definitions.
-The ratio of cost of goods sold to the average merchandise inventory.

• A)profitability measures
• B)operating income ratio
• C)cost of goods sold ratio
• D)ratio of liabilities to stockholders' equity
• E)return on total assets
• F)ratio of net sales to assets
• G)horizontal analysis
• H)leverage
• I)net income ratio
• J)liquidity
• K)liquidity measures
• L)merchandise inventory turnover

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Definitions:

Book Depreciation

The method of allocating the cost of a physical or tangible asset over its useful life for accounting and tax purposes.

Earnings and Profits

A measure used in corporate tax to assess the ability of a corporation to make distributions to its shareholders that are not considered a return of capital.

Basis

The amount of investment in property for tax purposes, used to calculate gain or loss on a sale or disposition.

Capital Gain

The profit from the sale of property or an investment, calculated as the difference between the selling price and the purchase price.