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Test your basic knowledge |
Financial Statements
Start Test
Study First
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. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company
Cash and Cash equivalents
Recievables
Trend index
Accounting Equation
2. Firm's ability to satisfy long term debt
Sales
Income Statement
Gross Profit Margin
Solvency ratios
3. Entities owning shares of stock are the owners of the corporation
Net Income
Television costs
Financial Leverage
Stockholders
4. Recorded when a company closes down or sells part of its business
Contributed capital (ending)
Common-size balance sheet
Noncurrent assets
Discontinued Operations
5. Total amount of depreciation expensed since the assets' date of purchase
Productivity
Accumulated Depreciation
Accumulated other comprehensive income
Asset Turnover
6. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares
Debt Ratio
Horizontal common size statement
Asset
Initial Public Offering (IPO)
7. legislative authority to set the reporting rules for accounting info of publicly held corporations
Cash and Cash equivalents
Liquidity
Recievables
SEC
8. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Revenues
Productivity
Extraordinary items
Current ratio
9. Refer to revenues from the sale of merchandise
Contributed Capital
Financing activities
Television costs
Sales
10. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans
Accumulated other comprehensive income
Trend index
Stockholders' Equity
Par value
11. Indicate that returns or discounts were subtracted from total sales
CPAS
Net Sales
Nonrecurring items
Price earnings ratio
12. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself
Expenses
Retained earnings(ending)
Treasury stock
Earnings per share
13. Expected to be converted into cash - sold - or consumed within the next 12 months
Expenses
Current assets
Depreciation Expense
Cash and Cash equivalents
14. Expresses each balance sheet item as a percentage of total assets
Revenue Recognition Principle
Contributed capital (ending)
Basic earnings per share
Vertical common size balance sheet
15. Net Income/ total assets reveals how efficiently assets are used to generate profit
Solvency
Price earnings ratio
Return on Asset
Stockholders
16. Amounts recieved from customers for products sold or services provided
Revenues
Stock options
Accounting Equation
Television costs
17. Shares are bought and sold on stock exchanges such as the New york stock exchange
Publicly traded
Stockholders
Accumulated Depreciation
Asset
18. Are liabilities due within 12 months
Operating Expenses
Asset
Current liabilites
Common size income statement
19. Arise from the sale of long-lived assets or investments
Nonrecurring items
Gains and Losses
Recievables
Vertical common size income statement
20. Contracts that give their holders the right to buy or sell shares of stock at a certain market price
Cost of Goods Sold(COGS)
Stock options
Extraordinary items
Operating Income
21. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Debt Ratio
Basic earnings per share
Revenue Recognition Principle
Cost of Goods Sold
22. Provides a snapshot of a company's financial position as of a certain date
GAAP
Balance Sheet
Asset
Liquidity
23. Measures how efficiently you can generate desired outputs from given inputs
Operating activities
Net Sales
Productivity
Example of Current Asset
24. Defines ethical behavior code of professional conduct
AICPAs
Accounts recievable
Operating Expenses
Discontinued Operations
25. Net Income/Sales Revenue measures the profitability of each dollar of revenue
Intangible assets
Return on Sales
Accounting Equation
Income Statement
26. Relate to the need for investing in property - plant - and equipment or expanding by making investments in other companies
Noncurrent liabilities
Liquidity ratios
Current liabilites
Investing activities
27. Reports the company's profitability during an accounting period
Income Statement
Goodwill
Statement of cash flows
Horizontal common size statement
28. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Shares Outstanding
Goodwill
Stockholders' Equity
Contributed capital (ending)
29. Carries a dividend rate which must be paid to preferred stockholders before any dividends can be paid to common stockholders
Preferred stock
Historical cost principle
Shares Outstanding
AICPAs
30. Amounts paid by stockholders to purchase common stock and preferred stock
Asset
Accrual Accounting
Contributed Capital
Noncurrent assets
31. Due after 12 months
FASB
Asset Turnover
Example of Current Asset
Noncurrent liabilities
32. Reports cash inflows + cash outflows during an accounting period
Creditor
Vertical common size balance sheet
Statement of cash flows
Contributed capital (ending)
33. States that companies should record assets and services at their acquisition cost - the amount paid for them - because this is the most reliable information
Par value
Historical cost principle
Balance Sheet
Common-size balance sheet
34. Total liabilities/ Total assets reveals the proportion of assets financed with debt and solvency
Asset Turnover
Example of Current Asset
Debt Ratio
Expenses
35. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Intangible assets
Accounts recievable
Stockholders
PCAOB
36. Patents - trademarks - and copyrights that have value but not any physical presence
Contributed Capital
Financing activities
Inventories
Intangible assets
37. Compares all amounts within on year to total assets of that same year
Horizontal common size statement
Vertical common size balance sheet
Vertical common size income statement
Common-size balance sheet
38. Cash - Accounts Recievable - Inventory
Financial Leverage
Net Income
Contributed Capital
Example of Current Asset
39. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance
Return on Common Equity
Shares Outstanding
Return on Asset
Statement of cash flows
40. Subtracting operating expenses from gross profit (Income from Operations)
Operating Income
FASB
Return on Asset
Shares Outstanding
41. Relate to a company's main business: selling products or services to earn net income
Revenues
Operating activities
Return on Sales
Gross Profit
42. A legal value assigned to each share of stock
Gains and Losses
Asset
Par value
Sales
43. Market price per share/EPS - to measure how expensive a company's stock is compared to EPS
Debtor
Stock dividends
Vertical common size balance sheet
Price earnings ratio
44. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Solvency ratios
Debtor
Current ratio
Common size income statement
45. Stock market trading price of the company's common stock
Liquidity
Price earnings ratio
Market value per share
Current liabilites
46. Borrowing corporation records bonds payable
Current assets
Debtor
Publicly traded
Stock dividends
47. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors
Return on Sales
Trend index
Earnings per share
Current liabilites
48. Extra value that is recorded when buying another company
Expenses
Return on Asset
Return on Common Equity
Goodwill
49. All assets not listed as current
Cash- Basis Accounting
Par value
Vertical common size income statement
Noncurrent assets
50. Portion of assets the owners are free and clear of any liabilities
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