Match the description with the correct term

Question 2 options:

Financial Ratio

Income Statement

Balance Sheet Equation

Cash Basis Accounting

Debt Ratio

Invoice

1.

A record of a product that was provided but not yet paid for

2.

A document that shows the company's revenue or expenses during a specific time period

3.

Assets = Liability + Owner Equity

4.

A way to compare two financial factors to analyze a company's financial health

5.

Total Liabilities : Total Assets

6.

Accounting that records income when cash is received and records expenses when cash is paid out

the correct and matched answers are,

Financial Ratio

4. A way to compare two financial factors to analyze a company's financial health

financial ratios are perfect when it comes to compare the companies in the same industry.

Income Statement

2. A document that shows the company's revenue or expenses during a specific time period

there are many rules and regulations along with standards to comply with when preparing this.

Balance Sheet Equation

3. Assets = Liability + Owner Equity

the best way to show the interrelatedness of assets and equity and liability. this is the basis of the double entry system.

Cash Basis Accounting

6. Accounting that records income when cash is received and records expenses when cash is paid out.

although not widely used, this method can trach the cash balance of the company and is useful.

Debt Ratio

5. Total Liabilities : Total Assets

a ratio that showcases the percentage of debt relatively to the asset base of the company. if this is higher, the company is riskier but that too depends on the industry.

Invoice

1. A record of a product that was provided but not yet paid for