Management 350 Chapter 15

____________ are money that is owed to the business by customers who purchased products or services on credit.

accounts receivables

A business deal where the parties have a prior relation or affiliation, but where the business is conducted as if they were unrealistic is called a _________________ transaction.

arms length

_________________ is the difference between the original cost of an asset and the total amount of depreciation expense that has been recognized to date.

book value

_____________ are assets that are expected to provide economic benefits for periods of time greater than one year.

capital assets

______________ is the business activities necessary to convert inputs into desired outputs.

process

_____________ is the comparison of productivity ratios to see the extent that an organization has generated more outputs with fewer inputs.

efficiency

_______________ is selling the rights to collect accounts receivables to an entity outside one's business.

factoring

______________ is the price at which goods and services are bought and sold between willing sellers and buyers in an arm's-length transaction.

fair market value

_______________ is used by internet firms where inventory is only purchased after a sale is made.

microinventory

_______________ is a long-term rental in which ownership of the new asset never passes to the person paying the lease.

operating lease

___________ is the ratio measure of how well a firm does in using its inputs to create outputs.

productivity

A _____________ is the line of distribution of a product from its start as materials outside the firm to its handling by sellers into the hands of customers.

supply chain

____________ is the process of transforming materials, labor, and energy into goods or services.

operations

The ______________ level is the minimum amount of inventory that results in minimizing the cost of lost sales and the time it takes to receive new stock.

optimum stocking

The total cost of obtaining an asset, including purchase price, transportation, and installation in order to ready it for its first productive use is called the _________________.

acquisition cost

A(n) ____________ is the activity identified by authoritative bodies as examples of optimal ways to get things done in a particular industry, profession, or trade.

best practice

______________ inventory is the process of physically counting business assets on a set schedule.

periodic

_______________ is contracting with people or companies outside your business to do work for a particular business.

outsourcing

The ____________ quantity is the quantity at which the total cost of inventory is minimized.

economic order

______________ system is a term for just-in time inventory systems in which product is ordered and placed into production only after a sale has been completed.

pull through

___________ is a product's or service's fitness for use, measured as durability, reliability, serviceability, style, ease of use, and dependability.

quality

T or F: Few small businesses provide credit directly to customers.

true

______________ are leases in which at the end of the period the asset becomes the property of the lease, possibly with an additional payment.

capital leases

_____________ is the process of communicating withing or to the organization about how the outputs worked or were received.

feedback

______________ is giving a third party legal rights to debts owed to the business in order to provide assurance that borrowed money will be repaid.

pledging receivables

The business activities necessary to convert inputs into desired outputs is known as a ___________.

process

The cost incurred to substitute one asset with an identical asset is called ___________.

replacement value

The two most commonly used financial ratios are the ________________ and __________________.

payback period, return on investment

_______________ is an amount of inventory carried to ensure that the business will not run out of inventory due to fluctuating sales levels.

safety stock

_____________ 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.

depreciation

The net amount realized after subtracting the costs of getting rid of an asset from its selling price is called ____________.

disposal value