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Essay / Research Paper Abstract
This 3-page paper discusses basic accounting terms such as asset, liabilty and equity. Also discussed is cost of capital. Bibliography lists 2 sources.
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3 pages (~225 words per page)
File: D0_MTacctterm.rtf
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Unformatted sample text from the term paper:
by an entity (such as an individual or corporation). Basically, assets are anything of value, that could be converted into cash. "Liquid assets" are those that can be converted at
once into liquidity, such as cash, stocks or bonds. Then there are "fixed assets," such as inventory, equipment or property, that take awhile longer to be converted into liquidity, depending
on market conditions. Liabilities - liabilities are financial obligations. In other words, money owed, or a potential loss.
Equity - equity is ownership interest in something. Most times, in a corporation,, it refers to people who buy stock, they have a stake
(or equity) in the company. Then there is equity in real estate, which is the difference between a propertys value and what an owner still owes against the lien.
Equity, by the way, is different from debt. In a debt situation, the company actually borrows money from a bank or other
institution, with the intent of repaying it (typically with interest). Equity, on the other hand, is not a loan, but involves investors actually buying pieces of the company. They do
so with the idea that theyll get something for their investment, which is that profits are shared out as dividends.
Retained Earnings - retained earnings are those that arent paid out to shareholders as dividends, but rather, that are reinvested in the company or to pay off some kind of
outstanding debt. General Ledger - the general ledger is a record of a business accounts. Its typically called the "final ledger"
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