Test your basic knowledge |

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. FASB established standards to facilitate interpretation of accounting information
Consistency
Income from Operations
Qualitative Characteristics
Property - Plant - and Equipment

2. Obligations that must be satisfied within 1 year or within normal operating cycle
Conservation
Current Liabilities
Income from Operations
Net Sales

3. Not related to a company's operating activities
Property - Plant - and Equipment
Normal Operating Cycle
Other Revenues and Expenses
Qualitative Characteristics

4. Benefit gained from providing information should be greater than the cost of providing it
Cost Benefit
General and Administrative Expenses
Debit to Equity
Cost of goods sold

5. Represents the stockholder's claim to the assets that are earned from operations and reinvested in corporate operations
Profit Margin
Retained Earnings
Full Disclosure
Gross Sales

6. Accountants prepare financial statements in accordance with practices that are intended to make the information understandable
Normal Operating Cycle
Retained Earnings
Qualitative Characteristics
Understandability

7. The expense for federal - state - and local taxes on corporate income
Gross Sales
Current Assets
Current Liabilities
Income Taxes

8. Net sales / (average total assets/2)
Return on Equity
Asset Turnover
Selling Expenses
Comparability

9. Debts that fall due more than 1 year in the future or beyond the normal operating cycle
Operating Expenses
Long-term Liabilities
Income from Operations
Return on Equity

10. Information presented in such a way that decision makers can recognize similarities - differences - and trends over different periods
Selling Expenses
Comparability
Retained Earnings
Gross Margin

11. Amount a merchandiser paid for the merchandise it sold during an accounting period
Cost Benefit
Return on Assets
Operating Expenses
Cost of goods sold

12. Tangible long-term assets used in a business day to day operations
Property - Plant - and Equipment
General and Administrative Expenses
Asset Turnover
Cost Benefit

13. Accounts reflect the amount of assets invested by stockholders
Profit Margin
Contributed Capital
Operating Expenses
Net Income

14. The average time it needs to go from spending cash to receiving cash
Conservation
Profit Margin
Normal Operating Cycle
Comparability

15. Expenses incurred in running a business other than the cost of goods sold
Long-term Liabilities
Operating Expenses
Current Ratio
Cost of goods sold

16. Total liabilities / owner's equity
Debit to Equity
Materiality
Conservation
Working Capital

17. Difference between gross margin and operating expense
Investments
Cost Benefit
Sales Returns and Allowances
Income from Operations

18. The difference between net sales and the cost of goods sold
Gross Margin
Other Revenues and Expenses
Qualitative Characteristics
Materiality

19. Total cash sales and total credit sales during an accounting period
Sales Returns and Allowances
Understandability
General and Administrative Expenses
Gross Sales

20. Net income / net sales
Income Taxes
Investments
Profit Margin
Return on Equity

21. Gross proceeds from sales less sales returns and allowance and any discounts allowed
Net Sales
Materiality
Current Assets
Cost of goods sold

22. Requires all financial statements presents all information relevant to users understanding of statements
Return on Equity
Full Disclosure
Return on Assets
Working Capital

23. The relative importance of an item or event
Other Revenues and Expenses
Operating Expenses
Return on Assets
Materiality

24. Net income / (average owner's equity/2)
Cost of goods sold
Investments
Gross Margin
Return on Equity

25. When a choice between 2 equally acceptable procedures - choose the one least like to overstate assets or income
Profit Margin
Investments
Conservation
Qualitative Characteristics

26. Cash refunds - credit on account - and discounts from selling prices made to customers who have received defective products or products that are otherwise unsatisfactory
Materiality
Income Taxes
Gross Sales
Sales Returns and Allowances

27. Cash and other asset that a company can reasonably expect to covert to cash. sell - or consumer within 1 year
Current Liabilities
Current Assets
Other Revenues and Expenses
Income from Operations

28. Expenses for accounting - personal - credit checking - collections - and other expenses that apply to insure expenses
Sales Returns and Allowances
Selling Expenses
Understandability
General and Administrative Expenses

29. Cost of storing goods and preparing them for sale
Comparability
Debit to Equity
Selling Expenses
Asset Turnover

30. Current assets / current liabilities
Full Disclosure
Consistency
Current Ratio
Gross Margin

31. Net income / (average total assets/2)
Retained Earnings
Return on Assets
Consistency
Investments

32. Current assets - current liabilities = working capital
Materiality
Working Capital
Conservation
Full Disclosure

33. 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
Understandability
Current Liabilities
Gross Sales
Investments

34. Once a company adopted an accounting procedure - it must use it from one period to the next
Income from Operations
Working Capital
Debit to Equity
Consistency

35. Final figure of an income statement
Cost Benefit
Return on Assets
Conservation
Net Income