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Listed Below Are Eight Terms Followed by a List of Phrases

Question 143

Matching

Listed below are eight terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term placing the number designating the term in the space provided.

Premises:
A company's ability to pay its current liabilities.
A means to express each item in a financial statement as a percentage of a base amount.
Accounting choices that result in reporting lower income, lower assets, and higher liabilities.
A profit or loss unusual in nature and infrequent in occurrence.
The sale or disposal of a significant component of a company's operations.
A company's ability to pay its long-term liabilities.
A tool to analyze trends in financial statement data for a single company over time.
Accounting choices that result in reporting higher income, higher assets, and lower liabilities.
Responses:
Aggressive accounting practices
Extraordinary item
Liquidity
Solvency
Vertical analysis
Conservative accounting practices
Horizontal analysis
Discontinued operation

Correct Answer:

A company's ability to pay its current liabilities.
A means to express each item in a financial statement as a percentage of a base amount.
Accounting choices that result in reporting lower income, lower assets, and higher liabilities.
A profit or loss unusual in nature and infrequent in occurrence.
The sale or disposal of a significant component of a company's operations.
A company's ability to pay its long-term liabilities.
A tool to analyze trends in financial statement data for a single company over time.
Accounting choices that result in reporting higher income, higher assets, and lower liabilities.
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