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
Qualitative Characteristics
General and Administrative Expenses
Contributed Capital
Comparability

2. Net income / net sales
Income from Operations
General and Administrative Expenses
Selling Expenses
Profit Margin

3. Net sales / (average total assets/2)
Operating Expenses
Materiality
Cost Benefit
Asset Turnover

4. Cost of storing goods and preparing them for sale
Retained Earnings
Sales Returns and Allowances
Cost Benefit
Selling Expenses

5. Cash and other asset that a company can reasonably expect to covert to cash. sell - or consumer within 1 year
Investments
Return on Assets
Current Assets
Understandability

6. Difference between gross margin and operating expense
Full Disclosure
Cost of goods sold
Contributed Capital
Income from Operations

7. Gross proceeds from sales less sales returns and allowance and any discounts allowed
Net Income
Return on Assets
Net Sales
Materiality

8. Net income / (average total assets/2)
Current Liabilities
Return on Assets
Materiality
Cost of goods sold

9. Total cash sales and total credit sales during an accounting period
Full Disclosure
General and Administrative Expenses
Current Liabilities
Gross Sales

10. Expenses incurred in running a business other than the cost of goods sold
Other Revenues and Expenses
Operating Expenses
Return on Equity
Return on Assets

11. Accountants prepare financial statements in accordance with practices that are intended to make the information understandable
Normal Operating Cycle
Current Ratio
Understandability
Sales Returns and Allowances

12. Current assets / current liabilities
Current Ratio
Normal Operating Cycle
Selling Expenses
Other Revenues and Expenses

13. Not related to a company's operating activities
Income Taxes
Working Capital
Other Revenues and Expenses
Net Income

14. Accounts reflect the amount of assets invested by stockholders
Materiality
Current Assets
General and Administrative Expenses
Contributed Capital

15. Expenses for accounting - personal - credit checking - collections - and other expenses that apply to insure expenses
General and Administrative Expenses
Current Assets
Net Sales
Qualitative Characteristics

16. 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
Comparability
Current Ratio
Investments
Selling Expenses

17. Final figure of an income statement
Understandability
Net Income
Profit Margin
Gross Margin

18. The average time it needs to go from spending cash to receiving cash
Normal Operating Cycle
General and Administrative Expenses
Selling Expenses
Debit to Equity

19. Current assets - current liabilities = working capital
Debit to Equity
Net Income
Long-term Liabilities
Working Capital

20. Amount a merchandiser paid for the merchandise it sold during an accounting period
Profit Margin
Asset Turnover
Cost of goods sold
Full Disclosure

21. Benefit gained from providing information should be greater than the cost of providing it
Return on Equity
Cost Benefit
Conservation
Qualitative Characteristics

22. Information presented in such a way that decision makers can recognize similarities - differences - and trends over different periods
Contributed Capital
Other Revenues and Expenses
Comparability
Retained Earnings

23. The expense for federal - state - and local taxes on corporate income
Income Taxes
Consistency
Understandability
Long-term Liabilities

24. Debts that fall due more than 1 year in the future or beyond the normal operating cycle
Profit Margin
Gross Margin
Materiality
Long-term Liabilities

25. Once a company adopted an accounting procedure - it must use it from one period to the next
Contributed Capital
Conservation
Consistency
Normal Operating Cycle

26. The relative importance of an item or event
Debit to Equity
Contributed Capital
Selling Expenses
Materiality

27. Requires all financial statements presents all information relevant to users understanding of statements
Full Disclosure
General and Administrative Expenses
Cost Benefit
Contributed Capital

28. Tangible long-term assets used in a business day to day operations
Income from Operations
Materiality
Qualitative Characteristics
Property - Plant - and Equipment

29. Obligations that must be satisfied within 1 year or within normal operating cycle
Return on Equity
Current Liabilities
Full Disclosure
Consistency

30. When a choice between 2 equally acceptable procedures - choose the one least like to overstate assets or income
Income Taxes
Working Capital
Conservation
Normal Operating Cycle

31. The difference between net sales and the cost of goods sold
Income from Operations
Consistency
Operating Expenses
Gross Margin

32. Total liabilities / owner's equity
Debit to Equity
Income from Operations
Return on Assets
Conservation

33. Represents the stockholder's claim to the assets that are earned from operations and reinvested in corporate operations
Operating Expenses
Return on Equity
Retained Earnings
Income Taxes

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

35. Net income / (average owner's equity/2)
Other Revenues and Expenses
Return on Equity
Investments
Gross Sales