Match the Following Terms with the Appropriate Definitions

question 144

Multiple Choice

Match the following terms with the appropriate definitions.
-A measure of operating efficiency,computed as net income divided by average total assets.

• A)Available-for-sale securities
• B)Equity method
• C)Parent company
• D)Consolidated financial statements
• E)Long-term investments
• F)Unrealized gain (loss)
• G)Trading securities
• H)Return on total assets
• I)Subsidiary
• J)Held-to-maturity securities

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Definitions:

Net Investment

The total amount of money spent on capital assets, minus depreciation. It reflects the increase in a company's or nation's capital stock.

Inventory Investment

Refers to the changes in the stock of goods that a company holds over a period, aiming to meet future sales demands or price changes.

Depreciation

An accounting method of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.

Gross Investment

The total amount of money spent on capital goods, or assets that will provide productive capacity for the future, without deducting for depreciation.