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






2. Licensed by the state/conduct audits






3. 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






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






5. Are liabilities due within 12 months






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






7. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance






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






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






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






11. Merchandise held for sale to customers






12. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself






13. Monies to be recieved by the company from customers






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






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






16. Assets=


17. Cost of television programs that will be aired during the next year






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






19. Costs incurred to produce revenues






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






21. Revenues-Expenses






22. Entity loaning the money records a bond recievable






23. Firm's ability to satisfy long term debt






24. Extra value that is recorded when buying another company






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






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






27. Defines ethical behavior code of professional conduct






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






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






30. Arise from the sale of long-lived assets or investments






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






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






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






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






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






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






37. All assets not listed as current






38. Borrowing corporation records bonds payable






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






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






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






42. Amounts to be recieved in the future from customers






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






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






45. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income






46. 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






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






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






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






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