Merchandising Companies That Are Small and Do Not Use a Perpetual

question 97

Multiple Choice

Merchandising companies that are small and do not use a perpetual inventory system may elect to use:

• A)A physical inventory system.
• B)A periodic inventory system.
• C)An inventory shrinkage method.
• D)An inventory subsidiary ledger system.

Understand the three properties of products and services that influence consumer purchase decisions and provide relevant examples.

Understand the scope and application of warranties in consumer transactions.

Identify the statutory obligations of car dealerships and the rights of consumers under warranty issues.

Recognize the legal principles surrounding statutory warranties and implied terms in the Sale of Goods Act.

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Definitions:

Average Accounting Return

A measure of investment profitability calculated as the average annual net earnings of a project divided by the average investment in the project.

Straight-Line Method

An accounting method for allocating the cost of an asset evenly over its useful life.

Cost of Capital

The obligatory profit percentage a corporation needs to achieve on its investments to keep its market share and attract investors.

IRR

Internal Rate of Return; a financial metric used to evaluate the profitability of investments, representing the discount rate that makes the net present value (NPV) of all cash flows equal to zero.