Chapter 5 Vocab

Front 1

Qualified Audit Opinion

Back 1

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.

Front 2

Asset Turnover Ratio

Back 2

Indicates how well assets are being used to generate revenues.

Front 3

Sarbanes-Oxley Act

Back 3

A set of regulations passed by Congress in 2002 in an attempt to improve financial reporting and restore investor confidence.

Front 4

Net Profit Margin Ratio

Back 4

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

Front 5

Time-Series Analysis

Back 5

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

Front 6

Debt-to-Assets Ratio

Back 6

Measures the proportion of total assets financed by debt, computed as total liabilities divided by total assets.

Front 7

International Financial Reporting Standards

Back 7

The rules used internationally to calculate and report information in the financial statements.

Front 8

Comparative Financial Statements

Back 8

Statements that report numbers for two or more time periods.

Front 9

Material Misstatements

Back 9

Amounts that are large enough to influence a user's decision.

Front 10

Unqualified Audit Opinion

Back 10

Auditors' statements that the financial statements are fair presentations in all material respects in conformity with GAAP.

Front 11

Single-Step Income Statement

Back 11

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