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. Smaller proportional increases in the number of shares outstanding






2. Merchandise held for sale to customers






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






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






5. Retained earnings + Net Income - (Dividends)






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






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






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






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

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10. Cost of bringing in revenues






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






12. Firm's ability to satisfy short term debt






13. Entity loaning the money records a bond recievable






14. Total liabilities/ Total assets reveals the proportion of assets financed with debt and solvency






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






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






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






18. Defines ethical behavior code of professional conduct






19. 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






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






21. A legal value assigned to each share of stock






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






23. Cash - Accounts Recievable - Inventory






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






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






26. Revenues-Expenses






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






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






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






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






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






32. Cost allocated to each year of the assets life






33. Due after 12 months






34. Contracts that give their holders the right to buy or sell shares of stock at a certain market price






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






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






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






38. Borrowing corporation records bonds payable






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






40. 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






41. Compares all amounts within on year to total assets of that same year






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






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






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






45. Costs incurred to produce revenues






46. Monies to be recieved by the company from customers






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






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






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






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