The Accounting Equation
This is the fundamental formula of all accounting.
What is Assets = Liabilities + Owner's Equity?
This highly liquid account is classified as an Asset.
What is Cash?
This analysis compares financial data from one time period to another.
What is Horizontal Analysis?
This term describes how easily an asset can be converted into cash.
What is Liquidity?
This economic system, built on private enterprise, is the foundation of the U.S. economy.
What is Capitalism?
On a T-Account, debits are always recorded on this side.
What is the left side?
Wages Payable and Mortgages fall under this broad classification.
What are Liabilities?
This analysis expresses items as a percentage of a "base" item, like revenue.
What is Vertical Analysis?
This is the amount of goods and services produced per unit of input.
What is Productivity?
While accounting tracks the past, this field focuses on planning for future growth and ROI.
What is Finance?
On a T-Account, credits are always recorded on this side.
What is the right side?
This account represents the shares of ownership in a corporation.
What is Common Stock?
This measures how a change in an independent variable affects a dependent variable.
What is Sensitivity Analysis?
This state occurs when a company's total debts exceed its total assets, and the debts can not be paid.
What is Insolvency?
This is the cost of raw materials, labor, and overhead used to make a product.
What is Cost of Goods Sold (COGS)?
This visual tool is used to display debits and credits for a specific general ledger account.
What is a T-Account?
Land and Buildings are categorized as this type of resource.
What are Assets?
Vertical analysis is used to compare items against this specific financial metric.
What is Revenue (or Total Sales)?
This is the result of subtracting current liabilities from current assets.
What is Working Capital?
This term describes using the least amount of inputs to get the highest amount of outputs.
What is Efficiency?
If a company has $50,000 in assets and $20,000 in liabilities, this is the amount of their Owner’s Equity.
What is $30,000?
This term describes the funds a business owner puts into the company from their own pocket.
What is Owner's Investment?
This determines a company’s overall market value.
What is Valuation?
To start a business, capital generally comes from these two specific sources.
What are Debt and Equity?
In capitalism, this "motive" is the primary driver of risk-taking and innovation.
What is the Profit Motive?