ENTITY THEORY is where a legal entity is regarded as having a separate existence from the owners. The financial statements are prepared from the perspective of the entity, not its owners. See PROPRIETARY THEORY.
LIQUIDITY RATIO see CASH RATIO.
SUBLEDGER is for the purpose of organizing revenue and expense transaction for only one account, e.g., For an individual salesperson, like a general ledger, the subledger has different default account types, each from a salespersons perspective, not a company perspective. Thus, Due is due to the salesperson and Payable is payable by the salesperson.
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