Which of the Following Statements About Trading Operations in an Organized

question 23

Multiple Choice

Which of the following statements about trading operations in an organized exchange is correct?

• A) Floor traders all deal in a wide variety of stocks.
• B) In most trades, specialists match buy and sell orders.
• C) In most trades, specialists buy for or sell from their own inventories.
• D) The SuperDOT system is used to expedite large trades of over 100,000 shares.

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Definitions:

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated by adding new purchases to beginning inventory and subtracting the cost of goods sold.

Periodic Inventory System

A periodic inventory system is a method of inventory valuation in which inventory is physically counted at the end of a specific period to determine the cost of goods sold and ending inventory.

Average Cost Method

An inventory costing method wherein the cost of goods sold and remaining inventory is valued at the average cost of all inventory items purchased during a period.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated either by a physical count or accounting estimation methods.