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. 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
Current Ratio
Investments
Current Assets
Asset Turnover

2. Total liabilities / owner's equity
Materiality
Contributed Capital
Long-term Liabilities
Debit to Equity

3. Amount a merchandiser paid for the merchandise it sold during an accounting period
Net Sales
Cost of goods sold
Investments
Property - Plant - and Equipment

4. Gross proceeds from sales less sales returns and allowance and any discounts allowed
Gross Sales
General and Administrative Expenses
Net Sales
Debit to Equity

5. Tangible long-term assets used in a business day to day operations
Normal Operating Cycle
Working Capital
Property - Plant - and Equipment
Understandability

6. Represents the stockholder's claim to the assets that are earned from operations and reinvested in corporate operations
Asset Turnover
Sales Returns and Allowances
Operating Expenses
Retained Earnings

7. Total cash sales and total credit sales during an accounting period
Gross Sales
Investments
Long-term Liabilities
Materiality

8. Accounts reflect the amount of assets invested by stockholders
Cost of goods sold
Net Income
Investments
Contributed Capital

9. The average time it needs to go from spending cash to receiving cash
Income Taxes
Normal Operating Cycle
Understandability
Contributed Capital

10. When a choice between 2 equally acceptable procedures - choose the one least like to overstate assets or income
Other Revenues and Expenses
Conservation
Long-term Liabilities
Contributed Capital

11. Expenses incurred in running a business other than the cost of goods sold
Comparability
Current Ratio
Other Revenues and Expenses
Operating Expenses

12. Once a company adopted an accounting procedure - it must use it from one period to the next
Consistency
Return on Assets
Profit Margin
Current Liabilities

13. Current assets / current liabilities
Long-term Liabilities
Income Taxes
Return on Assets
Current Ratio

14. Final figure of an income statement
Income Taxes
Net Income
Gross Sales
Net Sales

15. FASB established standards to facilitate interpretation of accounting information
Net Income
Investments
Cost of goods sold
Qualitative Characteristics

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
Sales Returns and Allowances
Long-term Liabilities
Materiality
Gross Sales

17. The expense for federal - state - and local taxes on corporate income
Income Taxes
Working Capital
Current Liabilities
Cost Benefit

18. Net income / (average total assets/2)
Return on Assets
Profit Margin
Current Liabilities
Asset Turnover

19. Cost of storing goods and preparing them for sale
Understandability
Other Revenues and Expenses
Cost Benefit
Selling Expenses

20. Debts that fall due more than 1 year in the future or beyond the normal operating cycle
Gross Margin
Long-term Liabilities
Operating Expenses
Gross Sales

21. Obligations that must be satisfied within 1 year or within normal operating cycle
Conservation
Materiality
Current Assets
Current Liabilities

22. Net income / net sales
Qualitative Characteristics
General and Administrative Expenses
Profit Margin
Debit to Equity

23. Accountants prepare financial statements in accordance with practices that are intended to make the information understandable
Net Income
Understandability
Comparability
Contributed Capital

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

25. Information presented in such a way that decision makers can recognize similarities - differences - and trends over different periods
Current Ratio
Income Taxes
Return on Assets
Comparability

26. Difference between gross margin and operating expense
Income from Operations
Retained Earnings
Understandability
Conservation

27. The difference between net sales and the cost of goods sold
Understandability
Gross Margin
Current Liabilities
Comparability

28. Not related to a company's operating activities
Other Revenues and Expenses
Current Ratio
Normal Operating Cycle
Income from Operations

29. Current assets - current liabilities = working capital
General and Administrative Expenses
Current Liabilities
Gross Sales
Working Capital

30. Cash and other asset that a company can reasonably expect to covert to cash. sell - or consumer within 1 year
Asset Turnover
Selling Expenses
Normal Operating Cycle
Current Assets

31. Net sales / (average total assets/2)
Cost of goods sold
Asset Turnover
General and Administrative Expenses
Property - Plant - and Equipment

32. Expenses for accounting - personal - credit checking - collections - and other expenses that apply to insure expenses
Operating Expenses
Normal Operating Cycle
General and Administrative Expenses
Profit Margin

33. The relative importance of an item or event
Materiality
Long-term Liabilities
Consistency
Working Capital

34. Benefit gained from providing information should be greater than the cost of providing it
Selling Expenses
Profit Margin
Property - Plant - and Equipment
Cost Benefit

35. Requires all financial statements presents all information relevant to users understanding of statements
Asset Turnover
Full Disclosure
Current Liabilities
General and Administrative Expenses