Question

Listed below are ten terms followed by a list of descriptive phrases.

a.	financial position	f.	operating capability
b.	equity	g.	assets
c.	net income	h.	acquisition cost
d.	liquidity	i.	control
e.	financial flexibility	j.	recognition

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____	1.	Process of recording and reporting an element in the financial statements
____	2.	Economic resource
____	3.	Ability of a company to use its financial resources to adapt to change
​ ____	4.	Economic resources, economic obligations, and their relationships  at a point in time
____	5.	Amount of time until an asset is converted into cash or a liability is paid
____	6.	The ability to deny or regulate the use of an asset
____	7.	Residual interest of a company
____	8.	Ability of a company to maintain a given physical level of operations
____	9.	Is measured in terms of changes in assets and liabilities
____	10.	Historical cost of an asset

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Required:

Match each descriptive phrase with the best-related term by placing the appropriate letter in the space provided.

Answer 1

j. recognition	1	Process of recording and reporting an element in the financial statements
g. assets	2	Economic resource
e. financial flexibility	3	Ability of a company to use its financial resources to adapt to change
a. financial position	4	Economic resources, economic obligations, and their relationships at a point in time
d. liquidity	5	Amount of time until an asset is converted into cash or a liability is paid
i. control	6	The ability to deny or regulate the use of an asset
b. equity	7	Residual interest of a company
f. operating capability	8	Ability of a company to maintain a given physical level of operations
c. net income	9	Is measured in terms of changes in assets and liabilities
h. acquisition cost	10	Historical cost of an asset