Matching Quiz

Match the following terms and definitions


1				Terms of a loan agreement that, if broken, entitle the lender to renegotiate loan terms or to force repayment.


2				Report numbers for two or more time periods.


3				Reports net income by subtracting a single group of expenses from a single group of revenues.


4				A misstatement large enough to influence the decisions of financial statement users.


5				Indicates that the financial statements are presented in accordance with GAAP.


6				Indicates that either the financial statements do not follow GAAP or the auditors were not able to complete the tests needed to determine whether the financial statements follow GAAP.


7				Compares a company’s results for one period to its own results over a series of time periods.


8				Compares the results of one company with those of others in the same section of the industry.


9				Indicates financing risk by computing the proportion of total assets financed by debt.


10				Indicates how well assets are being used to generate revenues by dividing total assets into total revenue.


11				Indicates how well expenses are controlled, by dividing net income by revenue.

Answer choices for questions 1 through 11

A)	Loan covenants
B)	Qualified audit opinion
C)	Unqualified audit opinion
D)	Single-step income statement
E)	Comparative financial statements
F)	Cross-sectional analysis
G)	Net profit margin ratio
H)	Time-series analysis
I)	Materiality
J)	Debt-to-assets ratio
K)	Asset turnover ratio