Match the Terms Below with the Correct Definitions

question 22

Multiple Choice

Match the terms below with the correct definitions.
-The firm's excess of its current assets over its current liabilities

• A)Property and equipment
• B)Reversing entries
• C)Gross profit
• D)Current ratio
• E)Working capital
• F)Net income or net loss
• G)Net sales
• H)Income from operations
• I)Long-term liabilities
• J)Liquidity

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Definitions:

Fair Value

An estimate of the price at which an asset or liability could be traded in a fair transaction between willing parties, other than in a forced or liquidation sale.

Cost Method

An accounting method used to record investments, where the investment is recorded at its acquisition cost without recognizing periodic gains or losses.

Outstanding Stock

The total shares of a company's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Net Income

The remaining earnings of a company after deducting all expenditures and taxes from the revenues.