Match Each of the Following Terms with the Appropriate Definition

question 59

Essay

Match each of the following terms with the appropriate definition.
1. The number of times a company's average inventory is sold during a period.
2. An inventory valuation method where each item in inventory is identified with a specific purchase and invoice.
3. The expected sales price of an item minus the cost of making the sale.
4. An inventory pricing method that assumes the unit prices of the beginning inventory and of each purchase are weighted by the number of units of each in inventory; the calculation occurs at the time of each sale.
5. A method for estimating an ending inventory based on the ratio of the amount of goods for sale at cost to the amount of goods for sale at retail price.
6. An estimate of days needed to convert the inventory at the end of the period into receivables or cash.
7. An inventory valuation method that assumes that inventory items are sold in the order acquired.
8. Financial statements prepared for periods of less than one year.
9. The accounting constraint that aims to select the less optimistic estimate when two or more
estimates are about equally likely.
10. An inventory valuation method that assumes costs for the most recent items purchased are sold first and charged to cost of goods sold.

Understand the relationship between sales, cost of goods sold (COGS), and inventory turnover.

Calculate and interpret the effective annual interest rate on financial arrangements.

Understand the significance of accounts receivable turnover as a measure of liquidity.

Understand the factors contributing to individual differences in intelligence.

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Definitions:

Debits

Entries on the left side of a double-entry bookkeeping system that increase asset or expense accounts, or decrease liability, equity, or revenue accounts.

Debits

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet or in an individual's bank account.

Assets

Resources owned or controlled by a person or company, expected to bring future economic benefits.

Credits

Accounting entries that increase liabilities or equity on the balance sheet, or decrease an asset or expense account on the income statement.