When Evaluating the Assets of an Existing Business, the Inventory

question 62

Multiple Choice

When evaluating the assets of an existing business, the inventory ________.

• A)is always current and salable
• B)usually appreciates over time, making the business a bargain
• C)should be judged on the basis of its market value, not its book value
• D)is usually stated honestly and does not need an independent audit

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Definitions:

Profit

The financial gain realized when the amount of revenue earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Profit Margin

The amount by which revenue from sales exceeds costs in a business, expressed as a percentage.

Sales-Oriented

A business approach focused primarily on generating sales regardless of customer needs or the longer-term company interests.

Objective

A specific, measurable, attainable, relevant, and time-bound goal that an individual or organization aims to achieve.