| Question |
Answer |
| Financial statements |
Are prepared to summarize the changes resulting from business transactions that occur during an accounting period. |
| Income Statement |
A report of the net income or net loss for a fiscal period; sometimes called a "profit and loss" statement. |
| Statement of Changes in Owner's Equity |
A financial statement prepared to summarize the effects of business transaction on the capital account. |
| Balance Sheet |
a report of the balances in all asset, liability, and owner's equity accounts at the end of the period. |
| Report form |
A format for preparing the balance sheet in which the classifications of accounts are listed one under another. |
| Ratio Analysis |
Involves the comparison of two amounts on a financial statement and the evaluation of the relationship between these amounts. |
| Profitability ratios |
Ratios used to evaluate the earning performance of a business during the accounting period. |
| Sales |
A revenue account to record the amount of the merchandise sold. |
| Return on sales |
The portion of each sales dollar that represents profit. To calculate this ratio, divide net income by sales. |
| Liquidity ratio |
The measure of a business's ability to pay its current debts as they become due and to provide for unexpected needs of cash. |
| Current ratio |
The relationship between current assets and current liabilities; calculated by dividing the dollar amount of current assets by the dollar amount of current liabilities. |
| Current Assets |
Assets that are either used up or converted to cash during the normal operating cycle of the business, usually one year. |
| Current Liabilities |
Debts of the business that must be paid within the next accounting period. |
| Quick ratio |
A measure of the relationship between short-term assets and current liabilities. |
BIOL3326 Forms
