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. Total liabilities / owner's equity
Long-term Liabilities
Property - Plant - and Equipment
Normal Operating Cycle
Debit to Equity

2. Expenses for accounting - personal - credit checking - collections - and other expenses that apply to insure expenses
Current Ratio
Asset Turnover
Net Sales
General and Administrative Expenses

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

4. Gross proceeds from sales less sales returns and allowance and any discounts allowed
Net Sales
Operating Expenses
Investments
Profit Margin

5. Accountants prepare financial statements in accordance with practices that are intended to make the information understandable
Current Assets
Understandability
Gross Sales
Full Disclosure

6. Tangible long-term assets used in a business day to day operations
Full Disclosure
Property - Plant - and Equipment
Comparability
Current Liabilities

7. Information presented in such a way that decision makers can recognize similarities - differences - and trends over different periods
Normal Operating Cycle
Cost of goods sold
Comparability
Income Taxes

8. The average time it needs to go from spending cash to receiving cash
Net Sales
Normal Operating Cycle
Materiality
Current Ratio

9. The difference between net sales and the cost of goods sold
Current Liabilities
Asset Turnover
Materiality
Gross Margin

10. Accounts reflect the amount of assets invested by stockholders
Understandability
Current Liabilities
Contributed Capital
Net Income

11. The relative importance of an item or event
Operating Expenses
Income Taxes
Return on Equity
Materiality

12. Net income / (average total assets/2)
Return on Equity
Net Sales
Return on Assets
Sales Returns and Allowances

13. Final figure of an income statement
Net Income
Understandability
Full Disclosure
Current Ratio

14. Not related to a company's operating activities
General and Administrative Expenses
Other Revenues and Expenses
Sales Returns and Allowances
Net Sales

15. Amount a merchandiser paid for the merchandise it sold during an accounting period
Cost of goods sold
Retained Earnings
Other Revenues and Expenses
Qualitative Characteristics

16. Cash and other asset that a company can reasonably expect to covert to cash. sell - or consumer within 1 year
Asset Turnover
Retained Earnings
Current Assets
Gross Sales

17. Obligations that must be satisfied within 1 year or within normal operating cycle
Normal Operating Cycle
Contributed Capital
Current Liabilities
Current Assets

18. Difference between gross margin and operating expense
Investments
Income from Operations
Current Assets
Net Sales

19. Cost of storing goods and preparing them for sale
Sales Returns and Allowances
Return on Assets
Materiality
Selling Expenses

20. Once a company adopted an accounting procedure - it must use it from one period to the next
Property - Plant - and Equipment
Current Liabilities
Consistency
Debit to Equity

21. Represents the stockholder's claim to the assets that are earned from operations and reinvested in corporate operations
Qualitative Characteristics
Profit Margin
Retained Earnings
Sales Returns and Allowances

22. Net sales / (average total assets/2)
Gross Margin
Asset Turnover
Materiality
Cost of goods sold

23. Current assets / current liabilities
Cost Benefit
General and Administrative Expenses
Current Liabilities
Current Ratio

24. Requires all financial statements presents all information relevant to users understanding of statements
Full Disclosure
Long-term Liabilities
Net Sales
Debit to Equity

25. Benefit gained from providing information should be greater than the cost of providing it
Consistency
Cost of goods sold
Cost Benefit
Materiality

26. The expense for federal - state - and local taxes on corporate income
Sales Returns and Allowances
Long-term Liabilities
Current Ratio
Income Taxes

27. Current assets - current liabilities = working capital
Retained Earnings
Long-term Liabilities
Profit Margin
Working Capital

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
Asset Turnover
Full Disclosure
Gross Sales
Investments

29. FASB established standards to facilitate interpretation of accounting information
Current Liabilities
Cost of goods sold
Qualitative Characteristics
Income Taxes

30. Expenses incurred in running a business other than the cost of goods sold
Retained Earnings
Property - Plant - and Equipment
Contributed Capital
Operating Expenses

31. Total cash sales and total credit sales during an accounting period
Return on Equity
Materiality
Gross Sales
Current Liabilities

32. Net income / (average owner's equity/2)
Debit to Equity
Return on Equity
Profit Margin
Working Capital

33. Net income / net sales
Profit Margin
Gross Sales
Conservation
Property - Plant - and Equipment

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

35. Debts that fall due more than 1 year in the future or beyond the normal operating cycle
Current Ratio
Cost of goods sold
Normal Operating Cycle
Long-term Liabilities