Accounts Receivable Represent the Amount of Cash Owed to the Company

question 20

True/False

Accounts receivable represent the amount of cash owed to the company by its customers from the sale of products or services on account.

---

Definitions:

FIFO Retail Inventory Method

An inventory valuation method which assumes that items purchased or produced first are sold first, thereby computing inventory based on the most recent prices.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases minus cost of goods sold.

Net Markups

The amount added to the cost price of goods to cover overhead and profit, minus any discounts or allowances.

Retail Inventory Method

A method used in accounting to estimate the value of a store's merchandise based on the retail price of the inventory.