If the return on equity is high, the company doesn’t require more debt investment.

Share holders can make money from their shares through the dividend paid regularly and from selling the shares to others.

Goodwill which can be acquired or self-generated is the purchase price minus real value of assets.

Basic earnings per share is normally higher than diluted earning per share.

Total liabilities must be equal to total assets in a Statement of Financial Position.

That price/earnings ratio of a stock is more than one means the stock is overvalued in the market.

The investors have to use portfolio to minimize risk.

Return on asset is the ratio which helps us decide whether or not to remain the project.

Basing on the gross profit margin, the company can give the pricing policies and determine if it can pay its expenses or not.

Management accounting is normally for internal use only.

The high turnover of inventory ensures that the company’s products are highly demanded in the market.

Common stock holders are the first to receive their money back in the event of liquidation.

The date recorded in the Balance sheet is the same as that recorded in the Statement of Earnings.

That price/earnings ratio of a stock is more than one means the stock is undervalued in the market.

There is no difference between savings and investment.

Working capital tells us whether we have enough short term assets to cover our short term liabilities.

Inventory turn-over can be compared with sales figure to show the need for the company products.

Diluted earnings per share is always bigger than basic earnings per share.