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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. Defines ethical behavior code of professional conduct






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






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






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






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






6. Firm's ability to satisfy short term debt






7. When a company sells stock to the public for the first time as a publicly traded corporation






8. Extra value that is recorded when buying another company






9. Merchandise held for sale to customers






10. Are liabilities due within 12 months






11. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans






12. Refer to revenues from the sale of merchandise






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






14. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company






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






16. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money






17. Entity loaning the money records a bond recievable






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






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






20. Revenues-Expenses






21. Attest to whether a company's financial statements comply with the GAAP rules






22. Monies to be recieved by the company from customers






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






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






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






26. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)






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






28. Retained earnings + Net Income - (Dividends)






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






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






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






32. A legal value assigned to each share of stock






33. All assets not listed as current






34. Actual currency - bank accounts - and investments that can be liquidated immediately






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






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






37. 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






38. Highly unusual transactions that are considered unusual in nature and infrequent in occurence






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






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






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






42. Market price per share/EPS - to measure how expensive a company's stock is compared to EPS






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






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






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






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






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






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






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






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







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