Test your basic knowledge |

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






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






3. Amounts paid by stockholders to purchase common stock and preferred stock






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






5. Proportional increases in the number of shares outstanding






6. Patents - trademarks - and copyrights that have value but not any physical presence






7. Equals the difference between revenues and cost of sales






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






9. Companies divide net income by the actual average number of common shares outstanding






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






11. Monies to be recieved by the company from customers






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






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






14. Refer to revenues from the sale of merchandise






15. Merchandise held for sale to customers






16. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members






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






18. Are liabilities due within 12 months






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






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






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






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






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






24. A legal value assigned to each share of stock






25. Largest expense item which reports the wholesale costs of inventory sold during the accounting period






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






27. 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






28. Due after 12 months






29. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due






30. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares






31. Recorded when a company closes down or sells part of its business






32. Defines ethical behavior code of professional conduct






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






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






35. A company's ability to pay liabilities for many years into the future






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






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






38. Entity loaning the money records a bond recievable






39. Cost of television programs that will be aired during the next year






40. Amounts to be recieved in the future from customers






41. Shares are bought and sold on stock exchanges such as the New york stock exchange






42. Retained earnings + Net Income - (Dividends)






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






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






45. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance






46. Attest to whether a company's financial statements comply with the GAAP rules






47. Total assets/Stockholders equity - Explains the difference between return on assets and return on equity. A high debt ratio and the high financial risk can boost profits






48. Measures how efficiently you can generate desired outputs from given inputs






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






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