Common rule of thumb in business, Accounting Basics

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80 - 20 rule - A common rule of thumb in business which says that 20% of the items produce80% of the action -- 20% of product line produces 80% of the sales, 20 percent of thecustomers generate 80% of the complaints and so on. In evaluating any business situation,look for small group that produces the major portion of transactions you areconcerned with. This rule isn't exactly accurate however it reflects a general truth, nothing isevenly distributed.


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