FUNCTIONAL-BASED ACCOUNTING Definition

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FUNCTIONAL-BASED ACCOUNTING focuses on organizational units such as departments and plants, uses financial outcome measures and static standards and benchmarks to evaluate performance, and emphasizes status quo and organizational stability. On the other hand, activity-based accounting focuses on processes, uses both operational and financial measures and dynamic standards, and emphasizes and supports continuous improvement. Activity-based accounting adds a process perspective.

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NEW DEBTOR is an entity that becomes bound as debtor by a security agreement previously entered into by another entity.

PORTFOLIO is a term for describing all the investments that an entity owns. A diversified portfolio contains a variety of investments.

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