Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 66

Following are a number of the key terms and concepts introduced in the chapter, along with a list of corresponding definitions. Match the appropriate letter for the key term or concept to each definition provided (items 1–10). Note that not all key terms and concepts will be used.

a. Ratio	j. Turnover
b. Trend analysis	k. Return on equity
c. Rate of return	l. Working capital
d. Interest	m. Liquidity
e. Principal	n. Current ratio
f. Risk	o. Acid-test ratio
g. Return on investment	p. Credit risk
h. DuPont model	q. Collect on delivery
i. Margin

_________ The percentage of net income divided by average owners’ equity for the fiscal period in which the net income was earned.

Step 1 of 3

Net Income:

The resultant amount of reducing all expenses of the company whether direct or indirect for the period from all revenues earned during the respective period is termed as net income.

Owner’s Equity:

Owner’s Equity is also known by the name of Shareholder’s Equity. It is also one of the parts of Balance sheet other than assets and liabilities. It is the Capital contributed by the owner of his business. The owner has right over his assets and he is liable for all his dues. Capital contributed and retained earnings are the two types of owner’s equity.