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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. Amount a merchandiser paid for the merchandise it sold during an accounting period
Understandability
Cost of goods sold
Working Capital
General and Administrative Expenses

2. Not related to a company's operating activities
Other Revenues and Expenses
Operating Expenses
Qualitative Characteristics
Debit to Equity

3. Accounts reflect the amount of assets invested by stockholders
Gross Margin
Contributed Capital
Sales Returns and Allowances
Understandability

4. The relative importance of an item or event
Materiality
Asset Turnover
Gross Margin
Debit to Equity

5. Difference between gross margin and operating expense
Income from Operations
Return on Assets
Operating Expenses
Other Revenues and Expenses

6. Cash refunds - credit on account - and discounts from selling prices made to customers who have received defective products or products that are otherwise unsatisfactory
Investments
Contributed Capital
Sales Returns and Allowances
Income from Operations

7. Gross proceeds from sales less sales returns and allowance and any discounts allowed
Return on Equity
General and Administrative Expenses
Net Sales
Contributed Capital

8. Obligations that must be satisfied within 1 year or within normal operating cycle
Materiality
Income Taxes
Sales Returns and Allowances
Current Liabilities

9. Accountants prepare financial statements in accordance with practices that are intended to make the information understandable
Income from Operations
Income Taxes
Materiality
Understandability

10. Net income / (average owner's equity/2)
Retained Earnings
Return on Equity
General and Administrative Expenses
Income from Operations

11. Net income / (average total assets/2)
Return on Equity
Income Taxes
Working Capital
Return on Assets

12. Net sales / (average total assets/2)
Working Capital
Asset Turnover
Operating Expenses
Income from Operations

13. Expenses incurred in running a business other than the cost of goods sold
Property - Plant - and Equipment
Income from Operations
Long-term Liabilities
Operating Expenses

14. Tangible long-term assets used in a business day to day operations
Return on Equity
Property - Plant - and Equipment
General and Administrative Expenses
Profit Margin

15. Requires all financial statements presents all information relevant to users understanding of statements
Cost of goods sold
Full Disclosure
Gross Sales
Property - Plant - and Equipment

16. Final figure of an income statement
Contributed Capital
Qualitative Characteristics
Income from Operations
Net Income

17. Current assets / current liabilities
Current Ratio
Qualitative Characteristics
Comparability
Contributed Capital

18. Cash and other asset that a company can reasonably expect to covert to cash. sell - or consumer within 1 year
Income from Operations
Comparability
Current Assets
Return on Equity

19. 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
Contributed Capital
Investments
Current Liabilities
Selling Expenses

20. Current assets - current liabilities = working capital
Sales Returns and Allowances
Working Capital
Other Revenues and Expenses
Full Disclosure

21. Total liabilities / owner's equity
Consistency
Qualitative Characteristics
Debit to Equity
Net Income

22. Once a company adopted an accounting procedure - it must use it from one period to the next
Full Disclosure
Conservation
Cost Benefit
Consistency

23. The difference between net sales and the cost of goods sold
Gross Margin
Return on Assets
Cost of goods sold
Full Disclosure

24. Represents the stockholder's claim to the assets that are earned from operations and reinvested in corporate operations
Operating Expenses
Retained Earnings
Current Liabilities
Consistency

25. Information presented in such a way that decision makers can recognize similarities - differences - and trends over different periods
Consistency
Comparability
Investments
Conservation

26. Net income / net sales
Long-term Liabilities
Profit Margin
Full Disclosure
Operating Expenses

27. When a choice between 2 equally acceptable procedures - choose the one least like to overstate assets or income
Selling Expenses
Conservation
Sales Returns and Allowances
Long-term Liabilities

28. Cost of storing goods and preparing them for sale
Cost of goods sold
Selling Expenses
Operating Expenses
Other Revenues and Expenses

29. The average time it needs to go from spending cash to receiving cash
General and Administrative Expenses
Full Disclosure
Current Assets
Normal Operating Cycle

30. Expenses for accounting - personal - credit checking - collections - and other expenses that apply to insure expenses
Materiality
Retained Earnings
Understandability
General and Administrative Expenses

31. FASB established standards to facilitate interpretation of accounting information
Debit to Equity
Current Assets
Operating Expenses
Qualitative Characteristics

32. The expense for federal - state - and local taxes on corporate income
Income from Operations
Income Taxes
Asset Turnover
Operating Expenses

33. Debts that fall due more than 1 year in the future or beyond the normal operating cycle
Return on Assets
Materiality
Asset Turnover
Long-term Liabilities

34. Total cash sales and total credit sales during an accounting period
Gross Sales
Return on Equity
Gross Margin
General and Administrative Expenses

35. Benefit gained from providing information should be greater than the cost of providing it
Consistency
Investments
Cost Benefit
Debit to Equity