PRO RATA Definition

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PRO RATA is the basis for allocating an amount proportionally to the items involved. An amount may be proportionally distributed to assets, expenses, funds, etc.

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80 - 20 RULE (Pareto Principle/Law) is a general rule of thumb in business that says that 20% of the items produce 80% of the activity, while 20% of the product line produces 80% of the sales, 20 % of the customers generate 80% of the complaints, and so on. In evaluating any business situation, look for the small group which produces the major portion of the transactions you are concerned with. This rule is not exactly accurate, but it reflects a general truth, nothing is evenly distributed.

INTERPERIOD TAX ALLOCATION is the process of apportioning income taxes among accounting periods.

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