Match Each Definition That Follows with the Term (A-H) It

question 117

Multiple Choice

Match each definition that follows with the term (a-h) it defines.
-an analysis of a company's ability to pay its current liabilities

• A)solvency
• B)leverage
• C)times interest earned
• D)horizontal analysis
• E)vertical analysis
• F)common-sized financial statements
• G)current position analysis
• H)profitability analysis

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Definitions:

GAAP

Generally Accepted Accounting Principles; a framework of accounting standards, rules and procedures defined by the professional accounting industry, used to compile financial statements.

FASB

The Financial Accounting Standards Board, an organization that establishes financial accounting and reporting standards in the United States.

Financial Accounting

The field of accounting focused on the summary, analysis, and reporting of financial transactions pertaining to a business, leading to the creation of financial statements.

Decision-making

The process of selecting the best course of action from available alternatives based on specific objectives and constraints.