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Unformatted text preview: 4. The Federal Reserve System is a governmental bank established by the Federal Reserve Act of 1913 that deals in the transaction of Federal Reserve Notes to provide the nation with a liquid currency. 5. A bond is a typically long-term asset that represents funds that a corporation borrows from public investors, or that are issued by the governments to raise money. Bonds are held for a specific, pre-determined length of time until repayment with a periodic payment of interest. Stocks, on the other hand, represent a small ownership of a corporation, are issued by the owner, and have no such obligation of length of possession and thus can be freely transferred between owners. 6. FIFO, or first-in, first-out valuation systems calculate the sale of goods by transferring the value of assets from inventory to cash based on the value of the first-purchased inventory. LIFO, or last-in, last-out, utilizes the most recently added inventory when transferring asset....
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- Spring '06