Match the Terms Below with the Correct Definitions

question 54

Multiple Choice

Match the terms below with the correct definitions.
-Categories under the main headings Assets, Liabilities, Owner's Equity

• A)Creditor
• B)Fundamental accounting equation
• C)Expenses
• D)Accounts
• E)Owner's equity
• F)Accounts receivable
• G)Asset
• H)Cash
• I)Business entity

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Definitions:

Contribution Margin Ratio

The percentage of each sales dollar that remains after variable costs are subtracted, contributing to fixed costs and profit.

Fixed Monthly Expenses

Costs that do not vary in total within a reasonably short time frame, such as rent, salaries, and insurance premiums, paid on a monthly basis.

Net Operating Income

A measure of a company's profitability, calculated by subtracting operating expenses from operating income.

Contribution Format

A type of income statement format that separates variable costs from fixed costs to highlight the contribution margin.