You have just accepted your first job out of college,which requires you to evaluate loan requests at Eastwood National Bank.The first loan request you receive is from Richard Enterprises.Richard Tracy,the CEO,is requesting $105,000 and brings you the following trial balance (or statement of accounts)for the first year of operations ended December 31.
What three accounts do you think should be relabeled for greater clarity?
Definitions:
Current Assets
Assets likely to be converted into cash, sold, or consumed within a year or the normal operating cycle of the business.
Profit Margin
A financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating the profitability of a business.
Net Income
The profit of a company after all expenses and taxes have been subtracted from total revenue.
Dollar of Sales
The total monetary value of sales transactions completed over a specific period.
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