Exam 16: Assets: Inventory and Operations Management

Assigning a high value to inventory results in increased sales margin and reported profit,but at the price of paying increased income taxes.

A system of recording the receipt and sale of each item as it occurs is called a _____.

Consider a product that costs $5 to make,and is sold for $15.What is the productivity ratio?

_____ refers to the machinery,tools,or materials used in the performance of the work of a business.

Describe the pros and cons of offering credit to customers.

The periodic inventory method is the most expensive method of maintaining records.

_____ is the cost incurred to substitute one asset with an identical asset.

Describe economic order quantity (EOQ)and its application in small businesses.

Short-term assets are also known as operating assets.

_____ is a general term for real estate,but it can also be applied as a legal term for anything owned or possessed.

The primary advantage of the payback period is that:

_____ is an arbitrary,but regular and systematic,method used to take asset value as an expense for the purpose of calculating net income or loss.

Identify the advantages and disadvantages of renting capital assets as opposed to buying.

Which of the following is one of the advantages of the return on investment (ROI)analysis?

_____ refers to a type of periodic inventory that conducts a count of the entire inventory being held for sale at a specific point in time.

The time value of money is the concept that a dollar received today is worth much more than is a dollar to be received at some time in the future.

Deciding when to place an order to purchase inventory is determined by (1)the rate of sales and (2)the time required to receive new stock.

For a small business,the amount and type of inventory held for resale is not important because the supply of inventory and demand of customers can be matched at all times.

Which of the following goals need to be addressed for extending credit to customers?

The practice of purchasing and accepting delivery of inventory only after it has been sold to the final customer is termed as _____.