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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. Defines ethical behavior code of professional conduct
Liquidity
Revenue Recognition Principle
AICPAs
Earnings per share
2. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares
Shares Outstanding
Asset
FASB
Accumulated other comprehensive income
3. Contracts that give their holders the right to buy or sell shares of stock at a certain market price
Stock options
Cost of Goods Sold
Noncurrent assets
Revenue Recognition Principle
4. A legal value assigned to each share of stock
Par value
Solvency
Current ratio
Publicly traded
5. This is what it costs to produce a product or provide a service
Revenues
Cost of Goods Sold(COGS)
Solvency ratios
Balance Sheet
6. Assets=
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7. Cost allocated to each year of the assets life
Depreciation Expense
SEC
Revenues
Recievables
8. Compares all amounts within one year to revenue of that same year
Depreciation Expense
Expenses
Common size income statement
Stock options
9. Shares are bought and sold on stock exchanges such as the New york stock exchange
Net Sales
Publicly traded
Stock options
FASB
10. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Asset
Goodwill
Contributed capital (ending)
Solvency ratios
11. Net Income/ total assets reveals how efficiently assets are used to generate profit
Preferred stock
Stock splits
Return on Asset
Retained Earnings
12. Amounts paid by stockholders to purchase common stock and preferred stock
Accumulated other comprehensive income
Financing activities
Contributed Capital
Preferred stock
13. When a company sells stock to the public for the first time as a publicly traded corporation
Recievables
Initial Public Offering (IPO)
Expenses
Solvency ratios
14. Net income earned by the company since its incorporation and not yet distributed as dividends
Retained Earnings
Investing activities
Vertical common size balance sheet
Accounts Payable
15. Operating Income/Interest Expense - compares the amount of income available to make interest payments to interest payment requirements
Financial Leverage
SEC
Times Interest Earned Ration
Common-size balance sheet
16. Cash - Accounts Recievable - Inventory
GAAP
Contributed capital (ending)
Stockholders' Equity
Example of Current Asset
17. Total amount of depreciation expensed since the assets' date of purchase
Liquidity
Accumulated Depreciation
FASB
Return on Sales
18. Annual common stock dividends paid/average number of common shares outstanding - amount of dividends paid annually for each share of stock held by investors
Dividend rate
Current ratio
GAAP
liabilities + stockholders' equity
19. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors
Noncurrent assets
Cash- Basis Accounting
Accounting Equation
Earnings per share
20. 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
Vertical common size income statement
Accumulated Depreciation
Goodwill
Financial Leverage
21. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares
Dividend rate
Stockholders
Shares Outstanding
AICPAs
22. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members
Goodwill
FASB
Statement of Stockholders equity
Expenses
23. Extra value that is recorded when buying another company
Solvency ratios
Nonrecurring items
Goodwill
Creditor
24. Expresses each balance sheet item as a percentage of total assets
SEC
Extraordinary items
Horizontal common size statement
Vertical common size balance sheet
25. Attest to whether a company's financial statements comply with the GAAP rules
Noncurrent liabilities
Revenues
Return on Common Equity
Audits
26. Records transactions when cash is recieved or paid
Preferred stock
Publicly traded
Cash- Basis Accounting
Debtor
27. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
CPAS
Revenue Recognition Principle
Net Sales
Expenses
28. Amounts recieved from customers for products sold or services provided
FASB
Solvency ratios
Revenues
Common-size balance sheet
29. Rules that management must follow when preparing financial statements available to investors
Horizontal common size statement
Asset Turnover
GAAP
Solvency
30. Reports the company's profitability during an accounting period
Preferred stock
Depreciation Expense
Accrual Accounting
Income Statement
31. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Common-size balance sheet
Net Income
Accrual Accounting
SEC
32. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself
Accounting Equation
Treasury stock
Cost of Goods Sold(COGS)
Expenses
33. Equals the difference between revenues and cost of sales
Asset Turnover
Intangible assets
Sales
Gross Profit
34. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard
Gross Profit
Horizontal common size statement
Debt Ratio
Balance Sheet
35. Entities owning shares of stock are the owners of the corporation
Statement of cash flows
Cash- Basis Accounting
Asset Turnover
Stockholders
36. Largest expense item which reports the wholesale costs of inventory sold during the accounting period
Balance Sheet
Trend index
Recievables
Cost of Goods Sold
37. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Operating Expenses
PCAOB
SEC
Initial Public Offering (IPO)
38. A company's ability to pay liabilities for many years into the future
Retained Earnings
Solvency
CPAS
Balance Sheet
39. Amounts to be recieved in the future from customers
Productivity
Accounts recievable
Stockholders
Market value per share
40. Are liabilities due within 12 months
Contributed Capital
GAAP
Current liabilites
Statement of cash flows
41. Compares all amounts within on year to total assets of that same year
Stock options
Common-size balance sheet
Solvency
Expenses
42. Actual currency - bank accounts - and investments that can be liquidated immediately
Cash and Cash equivalents
Cost of Goods Sold
Investing activities
Asset Turnover
43. Relate to a company's main business: selling products or services to earn net income
Operating activities
Retained earnings(ending)
Goodwill
Statement of Stockholders equity
44. Cost of television programs that will be aired during the next year
Treasury stock
Television costs
CPAS
Debtor
45. Relate to how a company finances its assets with debt or stockholders' equity
Asset Turnover
PCAOB
Intangible assets
Financing activities
46. Cost of bringing in revenues
Accounts Payable
Statement of Stockholders equity
Expenses
Current liabilites
47. Stock market trading price of the company's common stock
Cost of Goods Sold
Market value per share
Balance Sheet
Trend index
48. Portion of assets the owners are free and clear of any liabilities
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49. Firm's ability to satisfy long term debt
Solvency ratios
Current assets
Investing activities
Retained earnings(ending)
50. Costs incurred to produce revenues
Balance Sheet
Nonrecurring items
Intangible assets
Expenses