Accounting chapter 7 review

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Do many businesses choose a one-year fiscal period that ends during a period of high business activity?

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False

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The area of accounting which focuses on reporting information to external users.

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Financial Accounting

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The area of accounting which focuses on reporting information to internal users.

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Managerial Accounting

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A financial statement that reports the changes in the capital account for a proprietorship for a period of time.

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Statement of Owner's Equity

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A comparison between two components of financial information.

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Financial Ratio

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The calculation and interpretation of financial ratios

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Ratio Analysis

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Reporting an amount on a financial statement as a percentage of another item on the same financial statement.

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Vertical Analysis

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The ratio of net income to total sales.

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Return on Sales

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Accounting concept applied when financial statements contain all information necessary to understand a business’s financial condition.

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Full Disclosure

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Accounting concept applied when financial statements are prepared with the expectation that a business will remain in operation indefinitely

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Going Concern