Thursday, March 27, 2008


Sales/Receivables Ratio:
It is also called receivable turnover. This ratio method measures the number of times trade receivables turn during the fiscal year. The higher the ratio, the shorter the time between sale and cash collection.

Secured Loan:
A loan which is secured by marketable securities or other marketable valuables. Secured loans may be either time or demand loans.

Self-Liquidating Loan:
A short term commercial loan, usually supported by a lien on a given product or commodities, which is liquidated from the proceeds of the sale of the product or commodities. Example: Loans granted for the growing of crops.

Simple Journal Entry:
A simple journal entry is an entry that involves only one debit and one credit in the transaction. An example would be recording monthly depreciation expense. The debit is depreciation expense and the credit is accumulated depreciation. A compound journal entry contains multiple debits and credits.

Sole Proprietorship:
Sole proprietorship is synonymous with proprietorship. A sole proprietorship is an unincorporated business with only one owner.

Solvency is a company's long-term ability to meet all financial obligations. When a company cannot meet all its financial obligations, it becomes insolvent.

Specific identification:
An inventory method that identifies each item by cost and sale.

Statement Of Cash Flows:
See Cash Flow Statement.

A method of depreciation whereby the cost of the asset is divided by its useful life.

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