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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. Benefit gained from providing information should be greater than the cost of providing it
Profit Margin
Operating Expenses
Cost of goods sold
Cost Benefit

2. Net income / (average total assets/2)
Working Capital
Current Ratio
Net Income
Return on Assets

3. Net income / (average owner's equity/2)
Return on Equity
Property - Plant - and Equipment
Income from Operations
Net Income

4. Information presented in such a way that decision makers can recognize similarities - differences - and trends over different periods
Asset Turnover
Comparability
Materiality
Operating Expenses

5. When a choice between 2 equally acceptable procedures - choose the one least like to overstate assets or income
Full Disclosure
Return on Equity
Conservation
Cost Benefit

6. The difference between net sales and the cost of goods sold
Return on Equity
Cost of goods sold
Cost Benefit
Gross Margin

7. Current assets - current liabilities = working capital
Understandability
Property - Plant - and Equipment
Investments
Working Capital

8. Final figure of an income statement
Normal Operating Cycle
Working Capital
Net Income
Materiality

9. Not related to a company's operating activities
Other Revenues and Expenses
Asset Turnover
Net Sales
Long-term Liabilities

10. Accounts reflect the amount of assets invested by stockholders
Contributed Capital
Normal Operating Cycle
Property - Plant - and Equipment
Materiality

11. 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
Current Assets
Operating Expenses
Investments
Comparability

12. Tangible long-term assets used in a business day to day operations
Long-term Liabilities
Net Sales
Profit Margin
Property - Plant - and Equipment

13. Accountants prepare financial statements in accordance with practices that are intended to make the information understandable
Current Liabilities
Asset Turnover
Debit to Equity
Understandability

14. The average time it needs to go from spending cash to receiving cash
Retained Earnings
Return on Equity
Long-term Liabilities
Normal Operating Cycle

15. Total cash sales and total credit sales during an accounting period
Gross Sales
Contributed Capital
Full Disclosure
Investments

16. Current assets / current liabilities
Current Ratio
General and Administrative Expenses
Gross Sales
Normal Operating Cycle

17. Expenses for accounting - personal - credit checking - collections - and other expenses that apply to insure expenses
Net Income
Operating Expenses
Gross Margin
General and Administrative Expenses

18. Difference between gross margin and operating expense
Income Taxes
General and Administrative Expenses
Property - Plant - and Equipment
Income from Operations

19. Represents the stockholder's claim to the assets that are earned from operations and reinvested in corporate operations
Profit Margin
Income from Operations
Retained Earnings
Qualitative Characteristics

20. Obligations that must be satisfied within 1 year or within normal operating cycle
Current Liabilities
Net Income
Property - Plant - and Equipment
Debit to Equity

21. Requires all financial statements presents all information relevant to users understanding of statements
Working Capital
Cost Benefit
Investments
Full Disclosure

22. Debts that fall due more than 1 year in the future or beyond the normal operating cycle
Net Income
Long-term Liabilities
Return on Assets
Retained Earnings

23. Gross proceeds from sales less sales returns and allowance and any discounts allowed
Net Sales
Cost of goods sold
Cost Benefit
Income Taxes

24. The expense for federal - state - and local taxes on corporate income
Cost of goods sold
Net Income
Working Capital
Income Taxes

25. Once a company adopted an accounting procedure - it must use it from one period to the next
Return on Assets
Consistency
Conservation
Gross Margin

26. Cash and other asset that a company can reasonably expect to covert to cash. sell - or consumer within 1 year
Long-term Liabilities
Gross Sales
Cost of goods sold
Current Assets

27. Cost of storing goods and preparing them for sale
Selling Expenses
Contributed Capital
Working Capital
Comparability

28. Cash refunds - credit on account - and discounts from selling prices made to customers who have received defective products or products that are otherwise unsatisfactory
Normal Operating Cycle
Current Ratio
Consistency
Sales Returns and Allowances

29. Net sales / (average total assets/2)
Gross Margin
Asset Turnover
Sales Returns and Allowances
Property - Plant - and Equipment

30. Total liabilities / owner's equity
Sales Returns and Allowances
Net Sales
Debit to Equity
Current Ratio

31. Amount a merchandiser paid for the merchandise it sold during an accounting period
Income from Operations
Investments
Cost of goods sold
Current Liabilities

32. Net income / net sales
Current Assets
Gross Margin
Long-term Liabilities
Profit Margin

33. FASB established standards to facilitate interpretation of accounting information
Sales Returns and Allowances
Gross Margin
Qualitative Characteristics
Conservation

34. Expenses incurred in running a business other than the cost of goods sold
Comparability
Profit Margin
Operating Expenses
Retained Earnings

35. The relative importance of an item or event
General and Administrative Expenses
Retained Earnings
Gross Margin
Materiality