Accounts

merchandising business – a business that purchases and sells goods
liability – the company's debts and obligations

what the company OWES

percent of sales method – percent x sales
FASB – Financial Accounting Standards Board – independent – set accounting rules
Creditor – -Someone to whom a company or person owes a debt
Balance sheet – Reports a business's assets, liabilities, and capital on a specific date
When you recognize revenue when it is earned, and expenses when they are incurred you are operating under the – Accrual basis of accounting
Double- entry accounting – a financial recordkeeping system in which each transaction affects at least two accounts; for each debit there must be an equal credit.
coverage ratios – measures of the degree of protection for long-term creditors and investors
no-par value stock – common stock that has not been assigned a par value
Direct costs
Stockholders' Equity – 1. financing provided by owners (stock and capital)
2. earnings retained in the company
Statement of cash flows – summarizes cash inflows and outflows or a period of time
merchandising business – A type of business that purchases products from other businesses and sells them to customers.
Explain Cash Flow – Cash flow is the record of the amount of cash the business is expected to collect and to pay out.
Direct Labor – Labor costs that can easily be traced to a product
Credit – an agreement to pay for a purchase at a later time, an entry to the right side of a T account.
Liabilities and capital – the group of accounts which you credit when increased are
Direct cоsts
Days Earned – • Growth in terms of fleet
• If higher, more efficient on getting back on the road
• % of days you rent the vehicle = % of days earned – occupancy
Events – refer to the happenings that affect the accounting equation and are measured.
Credit – An entry recording a sum received, listed on the right-hand side or column of an account.

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