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. Smaller proportional increases in the number of shares outstanding






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






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






4. 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






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






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






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






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






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






10. Entity loaning the money records a bond recievable






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






12. Firm's ability to satisfy long term debt






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






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






15. Proportional increases in the number of shares outstanding






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






17. 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






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






19. Revenues-Expenses






20. Records transactions when cash is recieved or paid






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






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






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






24. Refer to revenues from the sale of merchandise






25. Firm's ability to satisfy short term debt






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






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






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






29. Borrowing corporation records bonds payable






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






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






32. Retained earnings + Net Income - (Dividends)






33. Amounts to be recieved in the future from customers






34. Cost of bringing in revenues






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






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






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






38. Assets=

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






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






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






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






43. All assets not listed as current






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






45. Equals the difference between revenues and cost of sales






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






47. Merchandise held for sale to customers






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






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






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