Charlie Is Sixty-Four Years Old and Is Looking Forward to His

question 7

Multiple Choice

Charlie is sixty-four years old and is looking forward to his retirement next year.He currently has all of his 401(k) retirement money invested in the stock market.What financial principle from Chapter 1 does he need to understand better?

• A)Nothing happens without a plan.
• B)Knowledge is the best protection.
• C)Stuff happens,the importance of liquidity.
• D)Risk and return go hand in hand.

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Definitions:

FIFO Method

"First In, First Out" is an inventory valuation method where goods are sold or used in the order in which they are acquired.

Gross Profit Method

An accounting technique used to estimate the cost of goods sold and ending inventory by applying a gross profit margin to net sales.

Perpetual Inventory System

An accounting method that records inventory transactions in real-time, providing a continuously updated inventory balance.

Inventory Destroyed

This term describes inventory items that have been lost, damaged beyond repair, or otherwise rendered unusable and must be written off from the business's accounts.