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. Net income / (average owner's equity/2)
Understandability
Return on Equity
Investments
Return on Assets


2. Expenses for accounting - personal - credit checking - collections - and other expenses that apply to insure expenses
Sales Returns and Allowances
General and Administrative Expenses
Materiality
Operating Expenses


3. Accountants prepare financial statements in accordance with practices that are intended to make the information understandable
Income Taxes
Full Disclosure
Understandability
Investments


4. Net income / net sales
Long-term Liabilities
Net Income
Profit Margin
Comparability


5. Accounts reflect the amount of assets invested by stockholders
Normal Operating Cycle
Cost Benefit
Return on Assets
Contributed Capital


6. Net sales / (average total assets/2)
Full Disclosure
Return on Equity
Asset Turnover
Return on Assets


7. Amount a merchandiser paid for the merchandise it sold during an accounting period
Contributed Capital
Other Revenues and Expenses
Cost of goods sold
Cost Benefit


8. Total cash sales and total credit sales during an accounting period
Income Taxes
Qualitative Characteristics
Selling Expenses
Gross Sales


9. Cost of storing goods and preparing them for sale
Net Income
Debit to Equity
Selling Expenses
Gross Margin


10. Total liabilities / owner's equity
Income Taxes
Net Income
Debit to Equity
Other Revenues and Expenses


11. The expense for federal - state - and local taxes on corporate income
Consistency
Return on Assets
Income Taxes
Asset Turnover


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


13. FASB established standards to facilitate interpretation of accounting information
Qualitative Characteristics
Debit to Equity
Current Assets
Current Ratio


14. Net income / (average total assets/2)
Comparability
Return on Equity
Cost of goods sold
Return on Assets


15. Cash refunds - credit on account - and discounts from selling prices made to customers who have received defective products or products that are otherwise unsatisfactory
Sales Returns and Allowances
Full Disclosure
General and Administrative Expenses
Income Taxes


16. When a choice between 2 equally acceptable procedures - choose the one least like to overstate assets or income
Qualitative Characteristics
Conservation
Current Assets
Property - Plant - and Equipment


17. Information presented in such a way that decision makers can recognize similarities - differences - and trends over different periods
Comparability
Understandability
Income from Operations
Return on Equity


18. Current assets - current liabilities = working capital
Working Capital
Sales Returns and Allowances
Current Ratio
Other Revenues and Expenses


19. Current assets / current liabilities
Other Revenues and Expenses
Conservation
Net Sales
Current Ratio


20. Not related to a company's operating activities
Consistency
Income Taxes
Other Revenues and Expenses
Current Liabilities


21. Requires all financial statements presents all information relevant to users understanding of statements
Long-term Liabilities
Full Disclosure
Cost of goods sold
Current Liabilities


22. Represents the stockholder's claim to the assets that are earned from operations and reinvested in corporate operations
Income from Operations
Materiality
Retained Earnings
Normal Operating Cycle


23. The average time it needs to go from spending cash to receiving cash
Normal Operating Cycle
Gross Margin
Sales Returns and Allowances
Return on Equity


24. Difference between gross margin and operating expense
Consistency
Full Disclosure
Working Capital
Income from Operations


25. The difference between net sales and the cost of goods sold
Full Disclosure
Gross Sales
Working Capital
Gross Margin


26. The relative importance of an item or event
Return on Equity
Full Disclosure
Materiality
Property - Plant - and Equipment


27. Once a company adopted an accounting procedure - it must use it from one period to the next
Materiality
Gross Margin
Conservation
Consistency


28. 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
Investments
Profit Margin
Conservation
Other Revenues and Expenses


29. Gross proceeds from sales less sales returns and allowance and any discounts allowed
Net Sales
Full Disclosure
Qualitative Characteristics
Other Revenues and Expenses


30. Final figure of an income statement
Income from Operations
Current Ratio
Net Income
Property - Plant - and Equipment


31. Tangible long-term assets used in a business day to day operations
Other Revenues and Expenses
Materiality
Asset Turnover
Property - Plant - and Equipment


32. Obligations that must be satisfied within 1 year or within normal operating cycle
Gross Sales
Cost of goods sold
Cost Benefit
Current Liabilities


33. Cash and other asset that a company can reasonably expect to covert to cash. sell - or consumer within 1 year
Return on Equity
Gross Sales
Gross Margin
Current Assets


34. Benefit gained from providing information should be greater than the cost of providing it
Cost Benefit
Gross Margin
Return on Assets
Qualitative Characteristics


35. Debts that fall due more than 1 year in the future or beyond the normal operating cycle
Working Capital
Income from Operations
Long-term Liabilities
Sales Returns and Allowances