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Test your basic knowledge |
Financial Statements
Start Test
Study First
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. Relate to a company's main business: selling products or services to earn net income
Current ratio
Asset
Operating activities
Television costs
2. Net income earned by the company since its incorporation and not yet distributed as dividends
Recievables
Shares Outstanding
Retained Earnings
Accumulated Depreciation
3. Firm's ability to satisfy long term debt
Noncurrent liabilities
Solvency ratios
Statement of cash flows
Contributed capital (ending)
4. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income
Return on Equity
Discontinued Operations
Audits
Accounts recievable
5. Expected to be converted into cash - sold - or consumed within the next 12 months
Noncurrent liabilities
Current assets
Expenses
Cost of Goods Sold(COGS)
6. Relate to how a company finances its assets with debt or stockholders' equity
Asset
Price earnings ratio
Financing activities
Accrual Accounting
7. legislative authority to set the reporting rules for accounting info of publicly held corporations
Historical cost principle
Accounts Payable
SEC
CPAS
8. Borrowing corporation records bonds payable
Initial Public Offering (IPO)
Financing activities
Debtor
Common-size balance sheet
9. Proportional increases in the number of shares outstanding
Cash and Cash equivalents
Cash- Basis Accounting
Stock splits
Treasury stock
10. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares
Financial Leverage
Historical cost principle
Shares Outstanding
Current liabilites
11. Sales revenue/ total assets measures how efficiently the company uses assets to generate revenue
Stockholders' Equity
Basic earnings per share
Cash and Cash equivalents
Asset Turnover
12. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Current ratio
Treasury stock
Vertical common size income statement
Asset Turnover
13. When a company sells stock to the public for the first time as a publicly traded corporation
Initial Public Offering (IPO)
Solvency
SEC
Vertical common size income statement
14. Monies to be recieved by the company from customers
Recievables
Net Income
Current ratio
Nonrecurring items
15. This is what it costs to produce a product or provide a service
Liquidity
Contributed capital (ending)
Cost of Goods Sold(COGS)
Common size income statement
16. Amounts paid by stockholders to purchase common stock and preferred stock
Publicly traded
Cash- Basis Accounting
Common-size balance sheet
Contributed Capital
17. Contracts that give their holders the right to buy or sell shares of stock at a certain market price
Stock options
Example of Current Asset
Shares Outstanding
Gross Profit
18. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Accrual Accounting
Sales
Common size income statement
Creditor
19. Recorded when a company closes down or sells part of its business
Discontinued Operations
Stockholders' Equity
Intangible assets
Inventories
20. Merchandise held for sale to customers
Inventories
Income Statement
Debt Ratio
Accounting Equation
21. Entity loaning the money records a bond recievable
Market value per share
Return on Equity
Solvency
Creditor
22. A legal value assigned to each share of stock
Par value
Accounting Equation
Operating Income
Creditor
23. Costs incurred to produce revenues
FASB
GAAP
Financial Leverage
Expenses
24. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company
Trend index
Treasury stock
Revenue Recognition Principle
Operating activities
25. All assets not listed as current
Productivity
Discontinued Operations
AICPAs
Noncurrent assets
26. Shares are bought and sold on stock exchanges such as the New york stock exchange
Income Statement
Sales
Financing activities
Publicly traded
27. Portion of assets the owners are free and clear of any liabilities
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28. Carries a dividend rate which must be paid to preferred stockholders before any dividends can be paid to common stockholders
Stock options
Television costs
Preferred stock
Return on Sales
29. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Net Sales
Accumulated Depreciation
Price earnings ratio
Contributed capital (ending)
30. Arise from the sale of long-lived assets or investments
Goodwill
Gains and Losses
Asset Turnover
liabilities + stockholders' equity
31. Measures how efficiently you can generate desired outputs from given inputs
Productivity
Discontinued Operations
Stock options
liabilities + stockholders' equity
32. Amounts to be recieved in the future from customers
Accounts recievable
Revenue Recognition Principle
Gross Profit
Accounts Payable
33. Cash - Accounts Recievable - Inventory
Current liabilites
Example of Current Asset
Current ratio
Audits
34. Assets- Liabilitie+ Equity OR Assets Liabilities- assets
Contributed Capital
Treasury stock
Retained earnings(ending)
Accounting Equation
35. Largest expense item which reports the wholesale costs of inventory sold during the accounting period
Cost of Goods Sold
Current assets
Noncurrent liabilities
Accumulated other comprehensive income
36. Patents - trademarks - and copyrights that have value but not any physical presence
Recievables
Statement of Stockholders equity
Intangible assets
Example of Current Asset
37. Entities owning shares of stock are the owners of the corporation
Dividend rate
Creditor
Stockholders
Accounts Payable
38. Refer to revenues from the sale of merchandise
Sales
Treasury stock
Retained earnings(ending)
Net Sales
39. Retained earnings + Net Income - (Dividends)
Retained earnings(ending)
Accounting Equation
Financial Leverage
Liquidity ratios
40. Total amount of depreciation expensed since the assets' date of purchase
Television costs
Investing activities
Financing activities
Accumulated Depreciation
41. Assets=
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42. Reports the company's profitability during an accounting period
Income Statement
Television costs
Common-size balance sheet
Intangible assets
43. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors
Return on Equity
Earnings per share
Revenue Recognition Principle
Expenses
44. Firm's ability to satisfy short term debt
Income Statement
Basic earnings per share
Liquidity ratios
SEC
45. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement
Nonrecurring items
Treasury stock
GAAP
liabilities + stockholders' equity
46. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Historical cost principle
PCAOB
Revenues
Expenses
47. Subtracting operating expenses from gross profit (Income from Operations)
Discontinued Operations
Gross Profit
Operating Income
FASB
48. Licensed by the state/conduct audits
Depreciation Expense
Television costs
Revenue Recognition Principle
CPAS
49. Reports cash inflows + cash outflows during an accounting period
Creditor
Statement of cash flows
Extraordinary items
Liquidity
50. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue
Financing activities
Sales
Gross Profit Margin
Solvency ratios