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Standard 5: Understands the
concepts of assets, liabilities, and owner’s
equity |
Level 4 Benchmarks (Grades 9-12)
- Uses common methods of computing
depreciation (e.g., straight-line method,
declining-balance method,
sum-of-the-year-digits method)
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- Understands the concept of profit and
the computation of the break-even point for
a business (i.e., total fixed costs ÷
[selling price - variable cost per unit])
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- Understands the difference between
current assets (i.e., expected to be
converted into cash within 12 months, such
as cash or merchandise), fixed assets (i.e.,
used over a period of several years of
normal operations, such as a building a
retailer owns), and intangible assets (e.g.,
reputation of servicing the public,
franchise fees, patents, copyrights)
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- Understands the concept of liabilities
(i.e., debts incurred by the business to
acquire assets)
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- Understands the difference between
current liabilities (i.e., an obligation
that will be paid by a current asset) and
long-term liabilities (i.e., debts that are
due after 12 months of maturity) and their
impact on financial statements
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- Understands appropriate accounting
techniques used to account for investments
and withdrawals by owners
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- Understands the concept of dividends
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