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. The difference between net sales and the cost of goods sold
Return on Equity
Current Ratio
Full Disclosure
Gross Margin

2. FASB established standards to facilitate interpretation of accounting information
Qualitative Characteristics
Operating Expenses
Long-term Liabilities
Gross Sales

3. Current assets / current liabilities
Cost of goods sold
Asset Turnover
Other Revenues and Expenses
Current Ratio

4. Net income / (average total assets/2)
Income from Operations
Consistency
Income Taxes
Return on Assets

5. Difference between gross margin and operating expense
Return on Equity
Conservation
Working Capital
Income from Operations

6. Net income / net sales
Sales Returns and Allowances
Gross Sales
Profit Margin
Materiality

7. 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
Operating Expenses
Current Assets
Investments
Gross Sales

8. Total liabilities / owner's equity
Comparability
Current Assets
Debit to Equity
Operating Expenses

9. The relative importance of an item or event
Materiality
Cost Benefit
Return on Equity
Net Income

10. The expense for federal - state - and local taxes on corporate income
Understandability
Return on Assets
Gross Sales
Income Taxes

11. Cost of storing goods and preparing them for sale
Selling Expenses
Normal Operating Cycle
Cost Benefit
Return on Assets

12. When a choice between 2 equally acceptable procedures - choose the one least like to overstate assets or income
Working Capital
Conservation
Return on Equity
Selling Expenses

13. Debts that fall due more than 1 year in the future or beyond the normal operating cycle
Long-term Liabilities
Profit Margin
Selling Expenses
Current Assets

14. The average time it needs to go from spending cash to receiving cash
Conservation
Property - Plant - and Equipment
Cost of goods sold
Normal Operating Cycle

15. Current assets - current liabilities = working capital
Return on Assets
Working Capital
Net Sales
Current Liabilities

16. Cash refunds - credit on account - and discounts from selling prices made to customers who have received defective products or products that are otherwise unsatisfactory
Operating Expenses
Investments
Sales Returns and Allowances
Working Capital

17. Amount a merchandiser paid for the merchandise it sold during an accounting period
Materiality
Cost of goods sold
Comparability
Debit to Equity

18. Represents the stockholder's claim to the assets that are earned from operations and reinvested in corporate operations
Current Assets
Return on Equity
Retained Earnings
Full Disclosure

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

20. Accountants prepare financial statements in accordance with practices that are intended to make the information understandable
Gross Sales
Understandability
Return on Equity
General and Administrative Expenses

21. Total cash sales and total credit sales during an accounting period
Debit to Equity
Contributed Capital
Gross Sales
Qualitative Characteristics

22. Expenses for accounting - personal - credit checking - collections - and other expenses that apply to insure expenses
Operating Expenses
Income from Operations
General and Administrative Expenses
Debit to Equity

23. Once a company adopted an accounting procedure - it must use it from one period to the next
Comparability
Other Revenues and Expenses
Consistency
Contributed Capital

24. Information presented in such a way that decision makers can recognize similarities - differences - and trends over different periods
General and Administrative Expenses
Gross Margin
Comparability
Working Capital

25. Expenses incurred in running a business other than the cost of goods sold
Income Taxes
Gross Margin
Operating Expenses
Understandability

26. Final figure of an income statement
Net Income
Return on Equity
Operating Expenses
Selling Expenses

27. Net sales / (average total assets/2)
Asset Turnover
Income from Operations
Return on Assets
Cost of goods sold

28. Benefit gained from providing information should be greater than the cost of providing it
Cost Benefit
General and Administrative Expenses
Property - Plant - and Equipment
Selling Expenses

29. Gross proceeds from sales less sales returns and allowance and any discounts allowed
Gross Margin
Net Sales
Consistency
Gross Sales

30. Obligations that must be satisfied within 1 year or within normal operating cycle
Full Disclosure
Current Liabilities
Gross Sales
Qualitative Characteristics

31. Tangible long-term assets used in a business day to day operations
General and Administrative Expenses
Investments
Property - Plant - and Equipment
Return on Equity

32. Cash and other asset that a company can reasonably expect to covert to cash. sell - or consumer within 1 year
Income Taxes
Comparability
Current Assets
Cost of goods sold

33. Requires all financial statements presents all information relevant to users understanding of statements
Net Income
Qualitative Characteristics
Net Sales
Full Disclosure

34. Net income / (average owner's equity/2)
Gross Margin
Contributed Capital
Return on Equity
Long-term Liabilities

35. Not related to a company's operating activities
Net Sales
Other Revenues and Expenses
Income from Operations
Materiality