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matching questions 83 match the accounting terms with the description 1 gross profit 4300144


Matching Questions


Match the accounting terms with the description.  

1. Gross profit percentage 

     A format by which revenues and expenses on the income statement, and assets and liabilities on the balance sheet, are divided into groups of similar accounts and a subtotal is given for each group 


2. Long-term liabilities 

     Assets consisting of cash, items that normally will be converted into cash within one year, or items that will be used up within one year 


3. Current assets 

     Debts that must be paid within one year 


4. Classified financial statement 

     A relationship between current assets and current liabilities that provides a measure of a firm's ability to pay its current debts 


5. Single-step income statement 

     The difference between net sales and the cost of goods sold 


6. Gross profit 

     The amount of gross profit from each dollar of sales 


7. Current liabilities 

     The number of times inventory is purchased and sold during the accounting period 


8. Current ratio 

     The ease with which an item can be converted into cash 


9. Multiple-step income statement 

     Debts of a business that are due more than one year in the future 


10. Liquidity 

     A type of income statement on which several subtotals are computed before the net income is calculated 


11. Reversing entries 

     Property that will be used in the business for longer than one year 


12. Plant and equipment 

     Journal entries made to reverse the effect of certain adjusting entries involving accrued income or accrued expenses to avoid problems in recording future payments or receipts of cash in a new accounting period 


13. Inventory turnover 

     A type of income statement where only one computation is needed to determine the net income (total revenue – total expenses = net income) 




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