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






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






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






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






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






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






7. A legal value assigned to each share of stock






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






9. Total liabilities/ Total assets reveals the proportion of assets financed with debt and solvency






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






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






12. Firm's ability to satisfy short term debt






13. Are liabilities due within 12 months






14. Amounts to be recieved in the future from customers






15. Cost allocated to each year of the assets life






16. Entity loaning the money records a bond recievable






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






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






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






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






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






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






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






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






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






26. Smaller proportional increases in the number of shares outstanding






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






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






29. Merchandise held for sale to customers






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






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






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






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






34. 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






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






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






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






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






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






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






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






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






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






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






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






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






47. Refer to revenues from the sale of merchandise






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






49. Records transactions when cash is recieved or paid






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