Match Each Item with Its Definition

question 80

Multiple Choice

Match each item with its definition.
-Common-sized financial statements

• A)Useful for comparing one company to another or a company with industry averages
• B)Focuses on a company’s ability to generate net income
• C)The percentage analysis of the relationship of each component in a financial statement to a total within the statement.
• D)An analysis of a company’s ability to pay its current liabilities.
• E)Occurs when a company abandons a segment.
• F)A percentage analysis of increases and decreases in related items in comparative financial statements.
• G)Something that is both unusual and infrequent.
• H)This requires a restatement of prior period financial statements.

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Definitions:

Interest-Bearing Note

A debt security that pays interest to the holder at regular intervals until maturity, at which point the principal is repaid.

Proceeds

The total amount of money received from a transaction before any deductions are made.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time, typically reported on the income statement.

Notes Payable

Notes payable refers to the written promises to pay a certain amount of money, usually including interest, by a certain date, and are recognized as liabilities on a company's balance sheet.