Exam 2: A Further Look at Financial Statements

Elements of financial statements include assets, equity, and expenses, but not liabilities.

Shareholders' equity

Which of the following would not normally be classified as a non-current liability?

Which of the following statements is true?

The current ratio is calculated as

Working capital is a measure of

Working capital is

Which of the following is not an enhancing qualitative characteristic?

A measure of profitability is the

Materiality and relevance are both defined in terms of what influences or makes a difference to a decision maker.

Liquidity ratios are concerned with the frequency and amounts of dividend payments.

Long-term investments appear in the property, plant, and equipment section of the statement of financial position.

The key components of the conceptual framework include

The statement of financial position is normally presented as follows, when listed in order of liquidity: Current assets, current liabilities, non-current assets, non-current liabilities, and shareholders' equity.

A single ratio by itself is not very meaningful.

A liquidity ratio measures the

Comparability in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next.

Which of the following is a constraint in accounting?

Consistency aids comparability when a company uses the same accounting principles and methods from year to year or when companies with similar circumstances use the same accounting principles.

Use the following information to answer questions -What is the debt to total assets?