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Describe the Double-Entry Accounting System? Explain When, Why and How

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Describe the double-entry accounting system? Explain when, why and how it is used?


Definitions:

FIFO

The first-in, first-out accounting method of inventory valuation.

LIFO

The last-in, first-out accounting method of valuing inventories.

Economic Earnings

The real flow of cash that a firm could pay out without impairing its productive capacity.

Liquidity Ratio

A financial metric used to determine a company's ability to pay off its short-term debts with its current assets.

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