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Financial Reporting And Analysis

Instructions:

Answer 35 questions in 15 minutes.
If you are not ready to take this test, you can study here.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. Accountants prepare financial statements in accordance with practices that are intended to make the information understandable
Understandability
Materiality
General and Administrative Expenses
Gross Margin

2. Represents the stockholder's claim to the assets that are earned from operations and reinvested in corporate operations
Current Liabilities
Retained Earnings
Current Ratio
Gross Margin

3. Benefit gained from providing information should be greater than the cost of providing it
Cost Benefit
Cost of goods sold
Other Revenues and Expenses
Current Ratio

4. Amount a merchandiser paid for the merchandise it sold during an accounting period
Long-term Liabilities
Current Ratio
Profit Margin
Cost of goods sold

5. Net sales / (average total assets/2)
Understandability
Income from Operations
Contributed Capital
Asset Turnover

6. Net income / (average owner's equity/2)
Debit to Equity
General and Administrative Expenses
Income Taxes
Return on Equity

7. The average time it needs to go from spending cash to receiving cash
Sales Returns and Allowances
Investments
Profit Margin
Normal Operating Cycle

8. Expenses for accounting - personal - credit checking - collections - and other expenses that apply to insure expenses
General and Administrative Expenses
Current Assets
Sales Returns and Allowances
Investments

9. Cost of storing goods and preparing them for sale
Selling Expenses
Return on Equity
Comparability
Conservation

10. Assets usually long term that are not used in normal business operations and management does not plan to convert to cash within the next year
Other Revenues and Expenses
Comparability
Investments
Cost of goods sold

11. Accounts reflect the amount of assets invested by stockholders
Cost of goods sold
Conservation
Contributed Capital
Selling Expenses

12. FASB established standards to facilitate interpretation of accounting information
Qualitative Characteristics
Cost of goods sold
Operating Expenses
Asset Turnover

13. Total cash sales and total credit sales during an accounting period
Conservation
Comparability
Gross Sales
Working Capital

14. The expense for federal - state - and local taxes on corporate income
General and Administrative Expenses
Long-term Liabilities
Understandability
Income Taxes

15. The relative importance of an item or event
Materiality
Cost of goods sold
Other Revenues and Expenses
Current Ratio

16. Difference between gross margin and operating expense
Selling Expenses
Net Sales
Income from Operations
Retained Earnings

17. Final figure of an income statement
Retained Earnings
Normal Operating Cycle
Profit Margin
Net Income

18. Requires all financial statements presents all information relevant to users understanding of statements
Materiality
Other Revenues and Expenses
Full Disclosure
Normal Operating Cycle

19. When a choice between 2 equally acceptable procedures - choose the one least like to overstate assets or income
Conservation
Property - Plant - and Equipment
Net Income
Debit to Equity

20. Cash refunds - credit on account - and discounts from selling prices made to customers who have received defective products or products that are otherwise unsatisfactory
Long-term Liabilities
Operating Expenses
Materiality
Sales Returns and Allowances

21. Once a company adopted an accounting procedure - it must use it from one period to the next
Consistency
Understandability
Asset Turnover
Current Liabilities

22. Net income / net sales
Profit Margin
Selling Expenses
Investments
Long-term Liabilities

23. Current assets - current liabilities = working capital
Sales Returns and Allowances
Gross Margin
Working Capital
Selling Expenses

24. Total liabilities / owner's equity
Debit to Equity
Asset Turnover
Cost Benefit
Selling Expenses

25. Current assets / current liabilities
Operating Expenses
Current Assets
Income from Operations
Current Ratio

26. Gross proceeds from sales less sales returns and allowance and any discounts allowed
Full Disclosure
Net Sales
Current Ratio
Income Taxes

27. Expenses incurred in running a business other than the cost of goods sold
Operating Expenses
Income Taxes
Net Income
Selling Expenses

28. Not related to a company's operating activities
Cost of goods sold
Qualitative Characteristics
Consistency
Other Revenues and Expenses

29. Debts that fall due more than 1 year in the future or beyond the normal operating cycle
Selling Expenses
Income Taxes
Long-term Liabilities
Income from Operations

30. The difference between net sales and the cost of goods sold
Qualitative Characteristics
Consistency
Gross Margin
Normal Operating Cycle

31. Net income / (average total assets/2)
Operating Expenses
Full Disclosure
Asset Turnover
Return on Assets

32. Cash and other asset that a company can reasonably expect to covert to cash. sell - or consumer within 1 year
Property - Plant - and Equipment
Current Assets
Understandability
Normal Operating Cycle

33. Information presented in such a way that decision makers can recognize similarities - differences - and trends over different periods
General and Administrative Expenses
Comparability
Contributed Capital
Return on Assets

34. Obligations that must be satisfied within 1 year or within normal operating cycle
Cost of goods sold
Current Liabilities
Asset Turnover
Long-term Liabilities

35. Tangible long-term assets used in a business day to day operations
Working Capital
Return on Equity
Property - Plant - and Equipment
Return on Assets