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ch 9
Term | Definition |
---|---|
balance sheet | a report of the balances in the permanent accounts on specific date |
current assets | the assets that are either used up or converted to cash during the normal operating cycle of the business |
current liabilities | the debts of the business that must be paid within the next accounting period |
current ratio | the relationship between current assets and current liabilities |
financial statements | reports prepared to summarize the changes resulting from business transactions that occur during the accounting period |
income statement | a report of the net income or net loss for a specific period |
liquidity ratio | measure of a business ability to pay its current debts as they become due and to provide for an unexpected need for cash |
profitability ratio | ratio used to evaluate the earnings performance of a business during the accounting period |
quick ratio | measure of the relationship between short term assets and current liabilities |
ratio analysis | process of evaluating the relationship between various amounts in the financial statements |
report form | balance sheet format that lists classifications one under another |
return on sales | ratio that examines the portion of each sales dollar that represents profit |
statement of cash flows | financial statement that summarizes the cash receipts and cash payments resulting from business activities during the period |
statement of changes in owners equity | financial statement that summarizes changes in the owners capital account as a result of business transactions during the period |
working capital | amount by which current assets exceeded current liabilities |