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






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






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






4. Records transactions when cash is recieved or paid






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






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






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






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






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






10. Cost of bringing in revenues






11. Portion of assets the owners are free and clear of any liabilities

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






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






14. Firm's ability to satisfy long term debt






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






16. Assets=

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






18. Proportional increases in the number of shares outstanding






19. Due after 12 months






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






21. Borrowing corporation records bonds payable






22. 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






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






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






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






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






27. Revenues-Expenses






28. Equals the difference between revenues and cost of sales






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






30. A company's ability to pay liabilities for many years into the future






31. Firm's ability to satisfy short term debt






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






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






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






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






36. Costs incurred to produce revenues






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






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






39. Retained earnings + Net Income - (Dividends)






40. Smaller proportional increases in the number of shares outstanding






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






42. 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






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






44. All assets not listed as current






45. Merchandise held for sale to customers






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






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






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






49. Subtracting operating expenses from gross profit (Income from Operations)






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