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Test your basic knowledge |
Financial Statements
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Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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. Defines ethical behavior code of professional conduct
Stock options
AICPAs
Publicly traded
Cost of Goods Sold(COGS)
2. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Example of Current Asset
Current ratio
Gross Profit Margin
Noncurrent liabilities
3. Carries a dividend rate which must be paid to preferred stockholders before any dividends can be paid to common stockholders
Contributed capital (ending)
Extraordinary items
Preferred stock
Intangible assets
4. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income
Liquidity ratios
Accumulated Depreciation
Return on Equity
Asset
5. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares
Cost of Goods Sold
Financial Leverage
Trend index
Asset
6. Firm's ability to satisfy short term debt
Liquidity ratios
Horizontal common size statement
Return on Equity
Gross Profit
7. When a company sells stock to the public for the first time as a publicly traded corporation
Audits
Noncurrent liabilities
Initial Public Offering (IPO)
Retained Earnings
8. Extra value that is recorded when buying another company
Financial Leverage
Goodwill
Vertical common size income statement
Return on Asset
9. Merchandise held for sale to customers
Inventories
Investing activities
Accounts recievable
Initial Public Offering (IPO)
10. Are liabilities due within 12 months
Television costs
Current liabilites
Noncurrent liabilities
Accounts recievable
11. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans
Contributed capital (ending)
Accumulated other comprehensive income
Discontinued Operations
Preferred stock
12. Refer to revenues from the sale of merchandise
Treasury stock
Contributed Capital
Extraordinary items
Sales
13. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement
Return on Equity
Nonrecurring items
AICPAs
Operating activities
14. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company
Trend index
Television costs
Current ratio
Debt Ratio
15. Operating Income/Interest Expense - compares the amount of income available to make interest payments to interest payment requirements
Times Interest Earned Ration
Net Income
Cost of Goods Sold
Initial Public Offering (IPO)
16. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Horizontal common size statement
Current ratio
PCAOB
Revenue Recognition Principle
17. Entity loaning the money records a bond recievable
Creditor
Stock dividends
GAAP
Asset Turnover
18. Net Income/Sales Revenue measures the profitability of each dollar of revenue
Investing activities
Return on Sales
SEC
Contributed Capital
19. Amounts paid by stockholders to purchase common stock and preferred stock
GAAP
Contributed Capital
Financial Leverage
Treasury stock
20. Revenues-Expenses
Cash- Basis Accounting
Noncurrent assets
Net Income
Solvency ratios
21. Attest to whether a company's financial statements comply with the GAAP rules
Extraordinary items
Audits
Goodwill
Stockholders' Equity
22. Monies to be recieved by the company from customers
Trend index
Vertical common size balance sheet
Recievables
Stockholders
23. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares
Shares Outstanding
Extraordinary items
Cost of Goods Sold
Stock splits
24. A company's ability to pay liabilities as they come due in the next year
Current ratio
Liquidity
Market value per share
Example of Current Asset
25. Net income earned by the company since its incorporation and not yet distributed as dividends
Expenses
Accumulated Depreciation
Retained Earnings
Depreciation Expense
26. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Return on Common Equity
Accounting Equation
Cash- Basis Accounting
Contributed capital (ending)
27. Includes all costs of generating sales besides cost of sales
Earnings per share
Operating Expenses
AICPAs
Return on Asset
28. Retained earnings + Net Income - (Dividends)
Discontinued Operations
Treasury stock
Recievables
Retained earnings(ending)
29. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors
Market value per share
Earnings per share
Current liabilites
Nonrecurring items
30. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself
Inventories
Treasury stock
Current assets
Expenses
31. Entities owning shares of stock are the owners of the corporation
Stock dividends
Gains and Losses
Stockholders
Asset Turnover
32. A legal value assigned to each share of stock
Contributed capital (ending)
Recievables
Par value
Retained Earnings
33. All assets not listed as current
Return on Asset
Solvency ratios
Noncurrent assets
Stock splits
34. Actual currency - bank accounts - and investments that can be liquidated immediately
Cash and Cash equivalents
Accrual Accounting
Vertical common size income statement
Accounts recievable
35. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Income Statement
Liquidity ratios
PCAOB
Stock dividends
36. Recorded when a company closes down or sells part of its business
Example of Current Asset
Discontinued Operations
Nonrecurring items
Noncurrent liabilities
37. 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
Statement of Stockholders equity
Return on Common Equity
Accrual Accounting
Vertical common size balance sheet
38. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Accounting Equation
Liquidity
Noncurrent liabilities
Extraordinary items
39. Shares are bought and sold on stock exchanges such as the New york stock exchange
liabilities + stockholders' equity
Cash- Basis Accounting
Publicly traded
SEC
40. Contracts that give their holders the right to buy or sell shares of stock at a certain market price
Initial Public Offering (IPO)
Debtor
Stock options
Cost of Goods Sold
41. Total amount of depreciation expensed since the assets' date of purchase
Inventories
Vertical common size income statement
Operating Expenses
Accumulated Depreciation
42. Market price per share/EPS - to measure how expensive a company's stock is compared to EPS
Price earnings ratio
Net Income
Inventories
Cost of Goods Sold(COGS)
43. Amounts recieved from customers for products sold or services provided
Cost of Goods Sold
Treasury stock
Revenues
Accrual Accounting
44. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Preferred stock
Accrual Accounting
Publicly traded
Accounts recievable
45. Reports the company's profitability during an accounting period
Market value per share
Statement of Stockholders equity
Income Statement
Nonrecurring items
46. Subtracting operating expenses from gross profit (Income from Operations)
Expenses
Accounting Equation
Operating Income
Cash and Cash equivalents
47. Reports cash inflows + cash outflows during an accounting period
Gross Profit Margin
Net Income
Statement of cash flows
Stockholders' Equity
48. Arise from the sale of long-lived assets or investments
Intangible assets
Stockholders' Equity
Gains and Losses
Solvency ratios
49. States that companies should record assets and services at their acquisition cost - the amount paid for them - because this is the most reliable information
Retained earnings(ending)
Common size income statement
SEC
Historical cost principle
50. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance
Intangible assets
Trend index
Return on Common Equity
SEC
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