0002 Basic Accounting Terminology Two

A line of credit that may be used over and over again up to a certain borrowing limit.

The book of accounts

Current assets divided by current liabilities.

These expenses do not increase with increased business, nor do they decrease with declining business activity.

A tax imposed on tangible personal property sold at retail.

Any borrowed or loaned capital invested in the business that must be repaid to  creditors.

The difference between gross profit and expenses when expenses are larger.

Any activity of a business enterprise that involves the exchange of values.

A book of original entry in which any business transactions is recorded in chronological order.

A cost which is uniform per unit, but fluctuates in direct proportion to change in the related total activity or volume.

Balance of costly goods paid for in small monthly (fractional) payments over a period of time.

Gross pay less payroll deductions; an employee’s take home pay.

A source document showing quantity, description, prices of items, total amount of purchase and the terms of payment.

Method to obtain cash for business operations by selling off accounts receivable to a third party.

The difference between current assets and current liabilities.

Money paid for the use of money.

A type of credit granted by retailers that is used by individuals or families for satisfaction of their own wants.

The amount of cash a company generates and uses during a period.

A comparison of profit and expense items in the income statement expressed as a percentage of sales income