Choose the Appropriate Letter to Match the Term and the Definition

question 41

Short Answer

Choose the appropriate letter to match the term and the definition. Not all definitions will be used.
Term
_____ Full Disclosure Principle
_____ Ratio Analysis
_____ Liquidity
_____ Going-Concern Assumption
_____ Profitability
_____ Solvency
_____ Trend Analysis
_____ Vertical Analysis
Definition
A) The ability of a company to meet its short-run financial obligations.
B) A type of analysis that focuses on relationships within a single financial statement.
C) Also known as time-series analysis.
D) The standard that companies should present all relevant information needed to interpret a company's financial position and performance.
E) The standard that expenses should be recognized when incurred.
F) A measure of current earnings performance.
G) A result from comparing a company's results to other companies in the industry.
H) A measure of long-run survivability.
I) The standard that revenue should be recorded when earned, provided payment is reasonably expected.
J) Measures that relate financial variables reported in one or more of the financial statements from the same year.
K) The characteristic that financial information needs to be valuable to decision makers.
L) The standard that takes for granted a company's near term financial survival.

• A) The ability of a company to meet its short-run financial obligations.
• B) A type of analysis that focuses on relationships within a single financial statement.
• C) Also known as time-series analysis.
• D) The standard that companies should present all relevant information needed to interpret a company's financial position and performance.
• E) The standard that expenses should be recognized when incurred.
• F) A measure of current earnings performance.
• G) A result from comparing a company's results to other companies in the industry.
• H) A measure of long-run survivability.
• I) The standard that revenue should be recorded when earned, provided payment is reasonably expected.
• J) Measures that relate financial variables reported in one or more of the financial statements from the same year.
• K) The characteristic that financial information needs to be valuable to decision makers.
• L) The standard that takes for granted a company's near term financial survival.

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Definitions:

Investment

The action or process of allocating resources, usually money, with the expectation of generating an income or profit.

Desirability

The attractiveness or appeal of something, often influenced by factors such as quality, utility, or scarcity.

Sum Of Money

A specific amount of currency or funds, often specified for particular transactions or savings.

Future

A legal contract to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future.