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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. Expected to be converted into cash - sold - or consumed within the next 12 months
Cash and Cash equivalents
Current assets
Productivity
Dividend rate
2. Compares all amounts within one year to revenue of that same year
Initial Public Offering (IPO)
Vertical common size income statement
Common size income statement
Times Interest Earned Ration
3. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
CPAS
Basic earnings per share
PCAOB
Gains and Losses
4. Cost of television programs that will be aired during the next year
Gross Profit
Stock options
Cost of Goods Sold(COGS)
Television costs
5. Amounts that the corporation must pay to suppliers in the future
Discontinued Operations
Net Income
Financial Leverage
Accounts Payable
6. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance
Treasury stock
Revenues
Return on Common Equity
Cash and Cash equivalents
7. Net Income/ total assets reveals how efficiently assets are used to generate profit
Return on Asset
Initial Public Offering (IPO)
SEC
Solvency ratios
8. Retained earnings + Net Income - (Dividends)
Retained earnings(ending)
Treasury stock
Sales
Contributed capital (ending)
9. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Extraordinary items
CPAS
Revenues
Liquidity
10. Recorded when a company closes down or sells part of its business
Discontinued Operations
Common size income statement
Earnings per share
Return on Common Equity
11. Operating Income/Interest Expense - compares the amount of income available to make interest payments to interest payment requirements
Stockholders' Equity
Expenses
Return on Sales
Times Interest Earned Ration
12. Smaller proportional increases in the number of shares outstanding
Preferred stock
Current liabilites
Stockholders
Stock dividends
13. Assets=
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14. A company's ability to pay liabilities as they come due in the next year
Liquidity
Discontinued Operations
Vertical common size balance sheet
Financial Leverage
15. Carries a dividend rate which must be paid to preferred stockholders before any dividends can be paid to common stockholders
liabilities + stockholders' equity
Preferred stock
Liquidity ratios
Net Income
16. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement
Horizontal common size statement
Noncurrent assets
Investing activities
Nonrecurring items
17. Amounts to be recieved in the future from customers
Gains and Losses
Accounts recievable
Trend index
Stock options
18. Relate to a company's main business: selling products or services to earn net income
Operating activities
Retained Earnings
Shares Outstanding
SEC
19. Companies divide net income by the actual average number of common shares outstanding
Example of Current Asset
Stockholders' Equity
Basic earnings per share
Dividend rate
20. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors
Cost of Goods Sold
Publicly traded
Common size income statement
Earnings per share
21. Cash - Accounts Recievable - Inventory
FASB
Example of Current Asset
Stockholders
Stock dividends
22. Refer to revenues from the sale of merchandise
Extraordinary items
Sales
Liquidity
Trend index
23. Arise from the sale of long-lived assets or investments
Retained earnings(ending)
Gains and Losses
Expenses
Operating Income
24. Expresses each balance sheet item as a percentage of total assets
Accumulated other comprehensive income
Net Income
Vertical common size balance sheet
Liquidity ratios
25. Amounts paid by stockholders to purchase common stock and preferred stock
Stock options
Television costs
Contributed Capital
Expenses
26. Measures how efficiently you can generate desired outputs from given inputs
Gross Profit Margin
Return on Equity
Productivity
Liquidity
27. When a company sells stock to the public for the first time as a publicly traded corporation
Treasury stock
Creditor
Example of Current Asset
Initial Public Offering (IPO)
28. All assets not listed as current
Asset
Noncurrent assets
Nonrecurring items
SEC
29. Reports cash inflows + cash outflows during an accounting period
Example of Current Asset
Statement of cash flows
Liquidity
Sales
30. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans
Accrual Accounting
Accumulated other comprehensive income
Intangible assets
Trend index
31. Contracts that give their holders the right to buy or sell shares of stock at a certain market price
Stock options
Revenue Recognition Principle
Solvency
Cash and Cash equivalents
32. Largest expense item which reports the wholesale costs of inventory sold during the accounting period
Cost of Goods Sold
Depreciation Expense
Return on Common Equity
Operating activities
33. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company
Statement of Stockholders equity
Trend index
Common size income statement
Sales
34. States that companies should record assets and services at their acquisition cost - the amount paid for them - because this is the most reliable information
Publicly traded
Statement of cash flows
Price earnings ratio
Historical cost principle
35. Total amount of depreciation expensed since the assets' date of purchase
Preferred stock
Accumulated Depreciation
SEC
Cost of Goods Sold
36. A company's ability to pay liabilities for many years into the future
Inventories
Cash- Basis Accounting
Solvency
Return on Sales
37. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income
Sales
Gross Profit
PCAOB
Return on Equity
38. Costs incurred to produce revenues
Expenses
Accounting Equation
Par value
Return on Asset
39. Amounts recieved from customers for products sold or services provided
Earnings per share
liabilities + stockholders' equity
Cash- Basis Accounting
Revenues
40. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Stock splits
Goodwill
Shares Outstanding
Contributed capital (ending)
41. Licensed by the state/conduct audits
CPAS
Example of Current Asset
Cash and Cash equivalents
Vertical common size income statement
42. Expresses each income statement item as a percentage of sales
Vertical common size income statement
Debt Ratio
Retained Earnings
Accounts recievable
43. Relate to how a company finances its assets with debt or stockholders' equity
SEC
Revenues
Contributed Capital
Financing activities
44. Firm's ability to satisfy long term debt
Current liabilites
Price earnings ratio
Solvency ratios
Cost of Goods Sold
45. Due after 12 months
Preferred stock
Common-size balance sheet
Noncurrent liabilities
Example of Current Asset
46. Net income earned by the company since its incorporation and not yet distributed as dividends
Discontinued Operations
Stockholders' Equity
Gains and Losses
Retained Earnings
47. Net Income/Sales Revenue measures the profitability of each dollar of revenue
Return on Sales
Horizontal common size statement
Net Income
Accumulated Depreciation
48. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Nonrecurring items
Current ratio
Shares Outstanding
Solvency
49. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself
Treasury stock
Initial Public Offering (IPO)
Inventories
GAAP
50. Compares all amounts within on year to total assets of that same year
Net Sales
Common-size balance sheet
Nonrecurring items
Investing activities