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. Includes all costs of generating sales besides cost of sales






2. Records transactions when cash is recieved or paid






3. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors






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






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






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






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






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






9. Entity loaning the money records a bond recievable






10. 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






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






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






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






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






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






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






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






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






19. Amounts to be recieved in the future from customers






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






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






22. Patents - trademarks - and copyrights that have value but not any physical presence






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






24. Refer to revenues from the sale of merchandise






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






26. Rules that management must follow when preparing financial statements available to investors






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






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






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






30. Cash - Accounts Recievable - Inventory






31. Net income earned by the company since its incorporation and not yet distributed as dividends






32. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares






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






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






35. Cost of bringing in revenues






36. Licensed by the state/conduct audits






37. Borrowing corporation records bonds payable






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






39. Equals the difference between revenues and cost of sales






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






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






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






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






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






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






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






47. Merchandise held for sale to customers






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






49. Cost allocated to each year of the assets life






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