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. Net income / net sales
Gross Margin
Current Assets
Qualitative Characteristics
Profit Margin

2. Represents the stockholder's claim to the assets that are earned from operations and reinvested in corporate operations
Current Assets
Retained Earnings
Operating Expenses
Full Disclosure

3. 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
Conservation
Investments
Gross Sales
Working Capital

4. Total cash sales and total credit sales during an accounting period
Normal Operating Cycle
Materiality
Gross Sales
Cost Benefit

5. The difference between net sales and the cost of goods sold
Net Sales
Gross Margin
Conservation
Qualitative Characteristics

6. Amount a merchandiser paid for the merchandise it sold during an accounting period
Sales Returns and Allowances
Cost Benefit
Cost of goods sold
Full Disclosure

7. Expenses incurred in running a business other than the cost of goods sold
Selling Expenses
Income Taxes
Understandability
Operating Expenses

8. Not related to a company's operating activities
Other Revenues and Expenses
Comparability
Current Liabilities
Net Sales

9. The relative importance of an item or event
Retained Earnings
Materiality
Normal Operating Cycle
Comparability

10. Current assets / current liabilities
Materiality
Comparability
Current Ratio
Gross Margin

11. Net income / (average total assets/2)
Cost Benefit
Return on Assets
Contributed Capital
Current Assets

12. Net income / (average owner's equity/2)
Consistency
Debit to Equity
Investments
Return on Equity

13. Accounts reflect the amount of assets invested by stockholders
Contributed Capital
General and Administrative Expenses
Cost of goods sold
Gross Sales

14. FASB established standards to facilitate interpretation of accounting information
Cost of goods sold
Return on Assets
Qualitative Characteristics
Income from Operations

15. Current assets - current liabilities = working capital
Working Capital
Debit to Equity
Full Disclosure
Operating Expenses

16. The average time it needs to go from spending cash to receiving cash
Conservation
Normal Operating Cycle
Understandability
Return on Equity

17. Expenses for accounting - personal - credit checking - collections - and other expenses that apply to insure expenses
General and Administrative Expenses
Normal Operating Cycle
Qualitative Characteristics
Operating Expenses

18. Cost of storing goods and preparing them for sale
Debit to Equity
Property - Plant - and Equipment
Net Income
Selling Expenses

19. Difference between gross margin and operating expense
Operating Expenses
Property - Plant - and Equipment
Income from Operations
Other Revenues and Expenses

20. The expense for federal - state - and local taxes on corporate income
Gross Sales
Consistency
Income Taxes
Income from Operations

21. Tangible long-term assets used in a business day to day operations
Return on Assets
Income from Operations
Gross Margin
Property - Plant - and Equipment

22. Cash and other asset that a company can reasonably expect to covert to cash. sell - or consumer within 1 year
Other Revenues and Expenses
Conservation
Current Assets
Gross Margin

23. Requires all financial statements presents all information relevant to users understanding of statements
Full Disclosure
Other Revenues and Expenses
Net Income
Conservation

24. 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
Debit to Equity
Return on Equity
Net Sales

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

26. Debts that fall due more than 1 year in the future or beyond the normal operating cycle
Retained Earnings
Long-term Liabilities
Current Liabilities
Consistency

27. Gross proceeds from sales less sales returns and allowance and any discounts allowed
Consistency
Retained Earnings
Net Sales
Sales Returns and Allowances

28. Accountants prepare financial statements in accordance with practices that are intended to make the information understandable
Understandability
Normal Operating Cycle
Conservation
Asset Turnover

29. Net sales / (average total assets/2)
Gross Margin
Selling Expenses
Sales Returns and Allowances
Asset Turnover

30. Final figure of an income statement
Contributed Capital
Consistency
Net Income
Gross Sales

31. When a choice between 2 equally acceptable procedures - choose the one least like to overstate assets or income
Conservation
Current Ratio
Working Capital
Income from Operations

32. Total liabilities / owner's equity
Income from Operations
Current Liabilities
Debit to Equity
Contributed Capital

33. Benefit gained from providing information should be greater than the cost of providing it
Selling Expenses
Cost Benefit
Property - Plant - and Equipment
Full Disclosure

34. Once a company adopted an accounting procedure - it must use it from one period to the next
Consistency
Net Income
Other Revenues and Expenses
Materiality

35. Obligations that must be satisfied within 1 year or within normal operating cycle
Current Liabilities
Gross Sales
Retained Earnings
Debit to Equity