An increase in prepaid expenses indicates that cash outlays for expenses exceeded the related expense incurred, thus, profit exceeded net cash from operating activities, and a deduction is needed in the reconciliation. Also, the amortization of premium on bonds payable causes a reduction of interest expense but does not increase cash; therefore, profit exceed net cash from operating activities, and a deduction is needed in the reconciliation. Balance sheets on December 31, Year 1, and December 31, Year 2, are presented below:

The basic economic order quantity (EOQ) model is based on the following variables: demand, variable cost per purchase order, and variable unit carrying cost. Thus, minimum stocking levels do not affect the EOQ.

The schema is a description of the overall logical structure of the database using data definition language DDL), which is the connection between the logical and physical structure of the database. DDL is used to define, or determine, the database.