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






2. 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






3. A legal value assigned to each share of stock






4. Refer to revenues from the sale of merchandise






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






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






7. Defines ethical behavior code of professional conduct






8. Borrowing corporation records bonds payable






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






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






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

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12. 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






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






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






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






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






17. Cash - Accounts Recievable - Inventory






18. Monies to be recieved by the company from customers






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






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






21. Amounts to be recieved in the future from customers






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






23. Actual currency - bank accounts - and investments that can be liquidated immediately






24. Merchandise held for sale to customers






25. Highly unusual transactions that are considered unusual in nature and infrequent in occurence






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






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






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






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






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






31. Cost allocated to each year of the assets life






32. Annual common stock dividends paid/average number of common shares outstanding - amount of dividends paid annually for each share of stock held by investors






33. Firm's ability to satisfy long term debt






34. Indicate that returns or discounts were subtracted from total sales






35. Includes all costs of generating sales besides cost of sales






36. Relate to a company's main business: selling products or services to earn net income






37. Cost of bringing in revenues






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






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






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






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






42. Proportional increases in the number of shares outstanding






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






44. Extra value that is recorded when buying another company






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






46. Entity loaning the money records a bond recievable






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






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






49. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans






50. Costs incurred to produce revenues