CTE State Assessment Vocab Flashcards
Disposable Income
Personal income less all additional personal taxes
Discretionary Income
Disposable income less savings and expenditures on food, clothing, and housing
Revenue
Dollar amount earned by a firm from selling goods, providing services, or performing business activities
Net Income/Loss (Profit/Loss)
Revenues exceed expenses / expenses exceed loss
Cost of Goods Sold (Direct Expenses)
The dollar amount equal to beginning inventory plus net purchases less ending inventory
Assets
The resources that a business owns
Liabilities
A firm’s debts and obligations
Owner’s Equity
Difference between a firm’s assets and its liabilities
Retained Earnings
Portion of a firm’s earnings not given to stockholders
Accounting Equation
Assets = Liabilities + Owner’s Equity
Cash Flow
The movement of money into and out of an organization
Depreciation
The process of apportioning the cost of a fixed asset over the period during which it will be used
Current Ratio
Current assets divided by current liabilities
Return on Owner’s Equity
A financial ratio calculated by dividing net income after taxes by owner’s equity
Return on Sales
A financial ratio calculated by dividing net income after taxes by net sales (profit margin)
Inventory Turnover
Ratio calculated by dividing the cost of goods sold in one year by the average value of the inventory
