ACC 231 EXAM 2 2026 FINAL REVIEW PACK COMPLETE QUESTION SET AND CORE CONCEPT SUMMARY

ACC 231 EXAM 2 2026 FINAL REVIEW PACK
COMPLETE QUESTION SET AND CORE
CONCEPT SUMMARY

◉ gross margin ratio formula. Answer: Gross margin/net sales
(want it to be higher than industry average)


◉ return on sales ratio. Answer: shows how good a job we do of
keeping the sales revenue


◉ return on sales ratio formula. Answer: net income/net
sales(higher than industry average)


◉ earnings per share (EPS). Answer: allows for a relative
comparison between companies (compare lowes against home
depot)


◉ earnings per share formula. Answer: net income/#shares of stock
outstanding


◉ return on assets ratio. Answer: looks at two important
profitability elements : earning and investments

, ◉ return on assets ratio formula. Answer: net income/total assets
(higher than industry average)


◉ return on equity ratio. Answer: "financial leverage" it links the
income statement to the balance sheet


◉ return on equity formula. Answer: net income/total stockholder's
equity


◉ what is the statement of owner's equity?. Answer: shows the
change in the net value of the business for a period of time (tracks
the balance of the resources claimed by the owners)


◉ what title applies to the st. of OE?. Answer: sole props &
partnerships.


◉ What is the balance sheet?. Answer: Assets=liabilities+OE


◉ what are assets?. Answer: the right to use resources that have
expected future economic benefit


◉ what are liabilities?. Answer: the obligation to transfer resources
to a supplier of goods or capital