Basic Accounting Math

Examples of property, plant & equipment – 1. Land
2. Building
3. Machinery
4. Equipment
Credit – An amount recorded on the right side of a T account
Common Stock – Is the basic voting stock issued by a corporation.
Inventory turnover – Measures how long on average inventory is held for. The higher the better because Low turnover will result in possible obsolescence or deterioration in inventory.
Direct Cost expenditures- what are they? – • Cost associated with owning and renting our cars
o Maintenance
o Depreciation (largest cost)
o Interest
o Liability
o Comp/Collision
o Fuel
o Tag and title
accrued revenues – unrecorded revenues that have been earned & for which cash has yet to be received
Reliable Cars has sales of \$807,200, total assets of \$1,105,100, and a profit margin of 9.68 percent. The firm has a total debt ratio of 64 percent. What is the return on equity?
Owner's capital – credit for NB
Yes – Are audit fees deductible
cash basis (NOT GAAP) – Revenues are recognized when cash is received and expenses recorded when cash is paid.
active accounts – aktif hesaplar
appraisal costs – cost incurred to determine whether products and
services are conforming to requirements
Calendar year – a twelvemonth period beginning January 1st and concluding on December 31st.
One-time-only special orders should only be accepted if:
a. incremental revenues exceed incremental costs
b. differential revenues exceed variable costs
c. incremental revenues exceed fixed costs
d. total revenues exceed total costs – a. incremental revenues exceed incremental costs
Reliаble Cаrs hаs sales оf \$807,200, tоtal assets оf \$1,105,100, and a profit margin of 9.68 percent. The firm has a total debt ratio of 64 percent. What is the return on equity?
Invoice – a bill (example of a source document)
MULTI-STEP INCOME STATEMENT – FORMAT THAT CONTAINS SUBTOTALS TO HIGHLIGHT SIGNIFICANT RELATIONSHIPS. IN ADDITION TO NET INCOME, IT REPORTS GROSS PROFIT AND OPERATING INCOME
What level of creditworthiness does JC Penney have? – Junk bond
DEBT RATIO – TOTAL LIABILITIES / TOTAL ASSETS

RATIO REVEALS THE PROPORTION OF A COMPANY'S ASSETS THAT IT HAS FINANCED WITH DEBT

SMALLER IS BETTER

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