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:

Credit Memo

A credit memo is a document issued by a seller to a buyer, reducing the amount that the buyer owes the seller under the terms of an earlier invoice.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through computerized point-of-sale systems and Enterprise Resource Planning systems.

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made at specific intervals, rather than continuously.

Purchases Discounts

Purchases discounts are reductions in price given by suppliers to buyers for early payment of invoices.