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Financial Statements

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. Net Income/Sales Revenue measures the profitability of each dollar of revenue






2. Relate to how a company finances its assets with debt or stockholders' equity






3. When a company sells stock to the public for the first time as a publicly traded corporation






4. Cash - Accounts Recievable - Inventory






5. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue






6. Cost of bringing in revenues






7. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors






8. Revenues-Expenses






9. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid






10. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company






11. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard






12. A company's ability to pay liabilities as they come due in the next year






13. Expected to be converted into cash - sold - or consumed within the next 12 months






14. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)






15. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself






16. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares






17. Rules that management must follow when preparing financial statements available to investors






18. Records transactions when cash is recieved or paid






19. Monies to be recieved by the company from customers






20. Compares all amounts within one year to revenue of that same year






21. Relate to the need for investing in property - plant - and equipment or expanding by making investments in other companies






22. Provides a snapshot of a company's financial position as of a certain date






23. Expresses each income statement item as a percentage of sales






24. Operating Income/Interest Expense - compares the amount of income available to make interest payments to interest payment requirements






25. Firm's ability to satisfy long term debt






26. Total amount of depreciation expensed since the assets' date of purchase






27. Assets- Liabilitie+ Equity OR Assets Liabilities- assets






28. 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






29. A legal value assigned to each share of stock






30. Net income earned by the company since its incorporation and not yet distributed as dividends






31. Establish auditing standards and conduct inspections of the public accounting firm that perform audits






32. Stock market trading price of the company's common stock






33. Carries a dividend rate which must be paid to preferred stockholders before any dividends can be paid to common stockholders






34. Entities owning shares of stock are the owners of the corporation






35. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement






36. States that companies should record assets and services at their acquisition cost - the amount paid for them - because this is the most reliable information






37. Net Income/ total assets reveals how efficiently assets are used to generate profit






38. Amounts recieved from customers for products sold or services provided






39. Retained earnings + Net Income - (Dividends)






40. Defines ethical behavior code of professional conduct






41. Portion of assets the owners are free and clear of any liabilities


42. Expresses each balance sheet item as a percentage of total assets






43. Amounts that the corporation must pay to suppliers in the future






44. Proportional increases in the number of shares outstanding






45. Reports the company's profitability during an accounting period






46. Reports cash inflows + cash outflows during an accounting period






47. Merchandise held for sale to customers






48. legislative authority to set the reporting rules for accounting info of publicly held corporations






49. Extra value that is recorded when buying another company






50. Subtracting operating expenses from gross profit (Income from Operations)






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