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Financial Statements

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. Relate to how a company finances its assets with debt or stockholders' equity






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






3. Cost allocated to each year of the assets life






4. Portion of assets the owners are free and clear of any liabilities

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5. Costs incurred to produce revenues






6. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue






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






8. Monies to be recieved by the company from customers






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






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






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






12. Are liabilities due within 12 months






13. Firm's ability to satisfy short term debt






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






15. Defines ethical behavior code of professional conduct






16. Proportional increases in the number of shares outstanding






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






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






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






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






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






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






23. Sales revenue/ total assets measures how efficiently the company uses assets to generate revenue






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






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






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






27. Compares all amounts within on year to total assets of that same year






28. Rules that management must follow when preparing financial statements available to investors






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






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






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






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






33. Indicate that returns or discounts were subtracted from total sales






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






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






36. Refer to revenues from the sale of merchandise






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






38. 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






39. This is what it costs to produce a product or provide a service






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






41. Amounts that the corporation must pay to suppliers in the future






42. A legal value assigned to each share of stock






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






44. Due after 12 months






45. Extra value that is recorded when buying another company






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






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






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






49. Revenues-Expenses






50. Retained earnings + Net Income - (Dividends)







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