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






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






3. Firm's ability to satisfy long term debt






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






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






6. Relate to how a company finances its assets with debt or stockholders' equity






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






8. Borrowing corporation records bonds payable






9. Proportional increases in the number of shares outstanding






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






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






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






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






14. Monies to be recieved by the company from customers






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






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






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






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






19. Recorded when a company closes down or sells part of its business






20. Merchandise held for sale to customers






21. Entity loaning the money records a bond recievable






22. A legal value assigned to each share of stock






23. Costs incurred to produce revenues






24. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company






25. All assets not listed as current






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






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






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






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






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






32. Amounts to be recieved in the future from customers






33. Cash - Accounts Recievable - Inventory






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






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






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






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






38. Refer to revenues from the sale of merchandise






39. Retained earnings + Net Income - (Dividends)






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






41. Assets=

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






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






44. Firm's ability to satisfy short term debt






45. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement






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






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






48. Licensed by the state/conduct audits






49. Reports cash inflows + cash outflows during an accounting period






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