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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. Sales revenue/ total assets measures how efficiently the company uses assets to generate revenue
Stock dividends
Asset Turnover
SEC
Retained earnings(ending)
2. Indicate that returns or discounts were subtracted from total sales
Return on Equity
Net Sales
Asset Turnover
Par value
3. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Preferred stock
Revenue Recognition Principle
Current ratio
liabilities + stockholders' equity
4. Records transactions when cash is recieved or paid
Solvency
Balance Sheet
Cash- Basis Accounting
Gains and Losses
5. 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 Common Equity
Horizontal common size statement
Earnings per share
Operating activities
6. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Retained earnings(ending)
Extraordinary items
Accrual Accounting
Current ratio
7. Reports the company's profitability during an accounting period
Income Statement
Operating Expenses
Net Sales
Accounts recievable
8. Arise from the sale of long-lived assets or investments
Gains and Losses
Statement of Stockholders equity
Return on Common Equity
Cost of Goods Sold(COGS)
9. Rules that management must follow when preparing financial statements available to investors
GAAP
Return on Equity
Initial Public Offering (IPO)
Stock options
10. Cost of bringing in revenues
Asset Turnover
Financial Leverage
Accounts Payable
Expenses
11. Portion of assets the owners are free and clear of any liabilities
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12. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue
Television costs
Gross Profit Margin
Current assets
Statement of cash flows
13. Assets- Liabilitie+ Equity OR Assets Liabilities- assets
Audits
Accounting Equation
Statement of cash flows
Return on Asset
14. Firm's ability to satisfy long term debt
Solvency ratios
FASB
Statement of Stockholders equity
Accrual Accounting
15. Net Income/ total assets reveals how efficiently assets are used to generate profit
Operating Income
Return on Asset
Revenues
Basic earnings per share
16. Assets=
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17. Market price per share/EPS - to measure how expensive a company's stock is compared to EPS
Financing activities
Retained Earnings
Price earnings ratio
Intangible assets
18. Proportional increases in the number of shares outstanding
Net Sales
Gross Profit Margin
Stock splits
CPAS
19. Due after 12 months
Stockholders
Nonrecurring items
Noncurrent liabilities
Expenses
20. Compares all amounts within on year to total assets of that same year
Accrual Accounting
Accounting Equation
Liquidity ratios
Common-size balance sheet
21. Borrowing corporation records bonds payable
CPAS
Debtor
Cash- Basis Accounting
Stock dividends
22. 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
Productivity
Noncurrent liabilities
Statement of Stockholders equity
Revenues
23. This is what it costs to produce a product or provide a service
Cost of Goods Sold(COGS)
Cash and Cash equivalents
Times Interest Earned Ration
Liquidity ratios
24. Relate to the need for investing in property - plant - and equipment or expanding by making investments in other companies
Noncurrent assets
Investing activities
Stockholders
Accrual Accounting
25. legislative authority to set the reporting rules for accounting info of publicly held corporations
Goodwill
Earnings per share
Publicly traded
SEC
26. Actual currency - bank accounts - and investments that can be liquidated immediately
Treasury stock
Common size income statement
Stockholders
Cash and Cash equivalents
27. Revenues-Expenses
Liquidity
Cost of Goods Sold
Net Income
Gains and Losses
28. Equals the difference between revenues and cost of sales
Statement of Stockholders equity
Liquidity
Intangible assets
Gross Profit
29. Net income earned by the company since its incorporation and not yet distributed as dividends
Financial Leverage
Retained Earnings
Market value per share
Liquidity ratios
30. A company's ability to pay liabilities for many years into the future
Solvency
Times Interest Earned Ration
Retained Earnings
Common-size balance sheet
31. Firm's ability to satisfy short term debt
Basic earnings per share
Recievables
Liquidity ratios
Accounts recievable
32. Stock market trading price of the company's common stock
Market value per share
Extraordinary items
Cost of Goods Sold(COGS)
Return on Common Equity
33. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself
Cash- Basis Accounting
Treasury stock
Par value
Liquidity
34. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Contributed capital (ending)
Stockholders' Equity
Par value
liabilities + stockholders' equity
35. A company's ability to pay liabilities as they come due in the next year
Expenses
Liquidity
Example of Current Asset
Audits
36. Costs incurred to produce revenues
Vertical common size balance sheet
Expenses
Financial Leverage
Publicly traded
37. Net Income/Sales Revenue measures the profitability of each dollar of revenue
Extraordinary items
Return on Sales
Gross Profit Margin
Balance Sheet
38. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares
Shares Outstanding
Sales
Stock splits
Productivity
39. Retained earnings + Net Income - (Dividends)
AICPAs
Retained earnings(ending)
Return on Asset
Common-size balance sheet
40. Smaller proportional increases in the number of shares outstanding
Accounting Equation
Net Income
Stock dividends
Publicly traded
41. Expresses each balance sheet item as a percentage of total assets
Operating Income
Vertical common size balance sheet
Accumulated Depreciation
Dividend rate
42. 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
Financial Leverage
Cost of Goods Sold(COGS)
Income Statement
Earnings per share
43. Carries a dividend rate which must be paid to preferred stockholders before any dividends can be paid to common stockholders
Horizontal common size statement
Net Sales
Preferred stock
Net Income
44. All assets not listed as current
Debt Ratio
Noncurrent assets
Return on Equity
Stockholders
45. Merchandise held for sale to customers
liabilities + stockholders' equity
Nonrecurring items
Inventories
Historical cost principle
46. Expected to be converted into cash - sold - or consumed within the next 12 months
Current assets
Current liabilites
Liquidity ratios
Return on Asset
47. Includes all costs of generating sales besides cost of sales
Publicly traded
Statement of Stockholders equity
liabilities + stockholders' equity
Operating Expenses
48. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans
Vertical common size balance sheet
Stockholders' Equity
Accumulated other comprehensive income
PCAOB
49. Subtracting operating expenses from gross profit (Income from Operations)
Asset Turnover
Discontinued Operations
Operating Income
Statement of cash flows
50. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard
Intangible assets
Vertical common size income statement
Accrual Accounting
Horizontal common size statement