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. Firm's ability to satisfy long term debt






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






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






4. Assets=

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5. Net Income/ total assets reveals how efficiently assets are used to generate profit






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






7. Defines ethical behavior code of professional conduct






8. Due after 12 months






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






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






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






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






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






14. Licensed by the state/conduct audits






15. Expresses each balance sheet item as a percentage of total assets






16. Entity loaning the money records a bond recievable






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






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






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






20. Equals the difference between revenues and cost of sales






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






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






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






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






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






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






27. Revenues-Expenses






28. Records transactions when cash is recieved or paid






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






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






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






32. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members






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






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






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






36. Stock market trading price of the company's common stock






37. Monies to be recieved by the company from customers






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






39. Extra value that is recorded when buying another company






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






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






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






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






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






45. Borrowing corporation records bonds payable






46. All assets not listed as current






47. Are liabilities due within 12 months






48. Measures how efficiently you can generate desired outputs from given inputs






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






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