The Expression, "What You Made Over What You Paid, Times

question 40

Multiple Choice

The expression, "What you made over what you paid, times one hundred," is a device to remember how to compute ________.

• A) ROS
• B) ROA
• C) ROI
• D) None of the above.

Calculate correct net income when adjusting for inventory valuation errors.

Analyze the effect of changing inventory valuation methods on tax expenses, net income, and company cash flows.

Determine the value of ending inventory and cost of goods sold using different inventory costing methods.

Correctly calculate cost of goods available for sale and cost of goods sold.

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Definitions:

Investment Opportunities

Options available to individuals and firms to invest capital with the intent to generate returns.

Bargain Purchases

Acquisitions made at a price significantly below the fair market value of the asset, resulting in an immediate gain for the purchaser.

Dividend Capture

A strategy in which an investor purchases securities to own them on the day of record and then quickly sells them; designed to attain dividends but avoid the risk of a lengthy hold.

Securities

Securities that signify ownership in a corporation listed on the stock market, a debt obligation with a government entity or company (bond), or entitlements to ownership through an option.