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Test your basic knowledge |
Financial Statements
Start Test
Study First
Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Current ratio
Net Sales
PCAOB
Depreciation Expense
2. A company's ability to pay liabilities for many years into the future
Depreciation Expense
AICPAs
Solvency
Liquidity
3. Portion of assets the owners are free and clear of any liabilities
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4. Assets- Liabilitie+ Equity OR Assets Liabilities- assets
Current assets
Asset Turnover
Accounting Equation
Operating activities
5. Market price per share/EPS - to measure how expensive a company's stock is compared to EPS
Vertical common size balance sheet
Expenses
Price earnings ratio
Sales
6. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Current ratio
Discontinued Operations
Debt Ratio
Sales
7. Amounts that the corporation must pay to suppliers in the future
Accounts Payable
PCAOB
Return on Common Equity
Vertical common size income statement
8. Contracts that give their holders the right to buy or sell shares of stock at a certain market price
Statement of cash flows
Stock options
Basic earnings per share
Times Interest Earned Ration
9. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Expenses
Extraordinary items
Accrual Accounting
Stockholders
10. Cost of television programs that will be aired during the next year
Television costs
Common size income statement
Return on Common Equity
Operating activities
11. Firm's ability to satisfy short term debt
Publicly traded
Balance Sheet
Television costs
Liquidity ratios
12. Amounts to be recieved in the future from customers
Accounts recievable
Retained earnings(ending)
Return on Equity
Contributed capital (ending)
13. All assets not listed as current
Expenses
Solvency ratios
Noncurrent assets
Financing activities
14. Firm's ability to satisfy long term debt
Return on Equity
Debtor
Sales
Solvency ratios
15. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members
FASB
Gross Profit Margin
Accrual Accounting
Revenue Recognition Principle
16. Stock market trading price of the company's common stock
Retained Earnings
Market value per share
Price earnings ratio
Retained earnings(ending)
17. Monies to be recieved by the company from customers
Accounts Payable
Gross Profit
Contributed Capital
Recievables
18. Retained earnings + Net Income - (Dividends)
Financial Leverage
Preferred stock
Retained earnings(ending)
Liquidity ratios
19. Patents - trademarks - and copyrights that have value but not any physical presence
Accrual Accounting
Financing activities
Intangible assets
Debt Ratio
20. Net Income/ total assets reveals how efficiently assets are used to generate profit
Operating Income
Cost of Goods Sold(COGS)
Financing activities
Return on Asset
21. Attest to whether a company's financial statements comply with the GAAP rules
Preferred stock
Nonrecurring items
PCAOB
Audits
22. Relate to a company's main business: selling products or services to earn net income
AICPAs
Expenses
Operating activities
Asset Turnover
23. Cash - Accounts Recievable - Inventory
Example of Current Asset
Common size income statement
Publicly traded
Revenues
24. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance
Return on Asset
Sales
Return on Common Equity
Operating Expenses
25. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Return on Sales
Statement of Stockholders equity
Revenue Recognition Principle
Cash- Basis Accounting
26. Revenues-Expenses
Cost of Goods Sold
Net Income
Market value per share
Debtor
27. Total amount of depreciation expensed since the assets' date of purchase
Horizontal common size statement
Trend index
Accumulated Depreciation
Contributed Capital
28. Smaller proportional increases in the number of shares outstanding
Stock splits
Earnings per share
Times Interest Earned Ration
Stock dividends
29. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue
Accounts Payable
Horizontal common size statement
Gross Profit Margin
Price earnings ratio
30. Net income earned by the company since its incorporation and not yet distributed as dividends
Retained Earnings
Stock options
Stockholders' Equity
Times Interest Earned Ration
31. Shares are bought and sold on stock exchanges such as the New york stock exchange
Stockholders
Net Sales
Publicly traded
Liquidity ratios
32. Costs incurred to produce revenues
Expenses
Preferred stock
Basic earnings per share
Intangible assets
33. Relate to the need for investing in property - plant - and equipment or expanding by making investments in other companies
Goodwill
Historical cost principle
Investing activities
Gains and Losses
34. Extra value that is recorded when buying another company
Accounts recievable
Accumulated other comprehensive income
Publicly traded
Goodwill
35. Measures how efficiently you can generate desired outputs from given inputs
Return on Equity
Revenues
Productivity
Noncurrent liabilities
36. Cost allocated to each year of the assets life
Market value per share
Financing activities
Depreciation Expense
Solvency
37. legislative authority to set the reporting rules for accounting info of publicly held corporations
Current ratio
SEC
Income Statement
Stockholders' Equity
38. A legal value assigned to each share of stock
Debt Ratio
Contributed capital (ending)
Par value
Stockholders
39. Amounts recieved from customers for products sold or services provided
Accounts recievable
Revenues
Horizontal common size statement
Retained Earnings
40. Records transactions when cash is recieved or paid
Noncurrent assets
Cash- Basis Accounting
Shares Outstanding
Current liabilites
41. Assets=
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42. Reports if the earnings of this accounting period are distributed as dividends or retained in the business as retained earnings. Also reports amounts paid by stockholders to purchase common stock and preferred stock
Income Statement
Creditor
Statement of Stockholders equity
Stock dividends
43. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income
Return on Equity
Creditor
Net Income
Television costs
44. Expresses each income statement item as a percentage of sales
Vertical common size income statement
Nonrecurring items
Investing activities
Solvency ratios
45. Equals the difference between revenues and cost of sales
Example of Current Asset
Gross Profit
Financial Leverage
Statement of Stockholders equity
46. Expected to be converted into cash - sold - or consumed within the next 12 months
Intangible assets
Return on Common Equity
Current assets
Statement of cash flows
47. Compares all amounts within on year to total assets of that same year
Common-size balance sheet
Operating Income
Depreciation Expense
Treasury stock
48. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Cash and Cash equivalents
Accrual Accounting
Accounts Payable
Inventories
49. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard
Horizontal common size statement
Productivity
Balance Sheet
CPAS
50. Are liabilities due within 12 months
Current liabilites
Price earnings ratio
Investing activities
Market value per share