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. All assets not listed as current






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






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






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






5. Extra value that is recorded when buying another company






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






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






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






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






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






11. Retained earnings + Net Income - (Dividends)






12. Firm's ability to satisfy long term debt






13. Firm's ability to satisfy short term debt






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






15. 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






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






17. Merchandise held for sale to customers






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






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






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






21. 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






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






23. Relate to the need for investing in property - plant - and equipment or expanding by making investments in other companies






24. Equals the difference between revenues and cost of sales






25. Amounts to be recieved in the future from customers






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






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






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






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






30. Cost allocated to each year of the assets life






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






32. Records transactions when cash is recieved or paid






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






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






35. legislative authority to set the reporting rules for accounting info of publicly held corporations






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






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






38. Borrowing corporation records bonds payable






39. Smaller proportional increases in the number of shares outstanding






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






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






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






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






44. Cash - Accounts Recievable - Inventory






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






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






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






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






49. Due after 12 months






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