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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. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Earnings per share
Financial Leverage
Contributed Capital
Extraordinary items
2. Smaller proportional increases in the number of shares outstanding
Stock dividends
Stockholders
Common-size balance sheet
Example of Current Asset
3. Net Income/Sales Revenue measures the profitability of each dollar of revenue
Return on Equity
Return on Sales
Statement of Stockholders equity
Gains and Losses
4. Records transactions when cash is recieved or paid
Debtor
Sales
Stock options
Cash- Basis Accounting
5. Assets- Liabilitie+ Equity OR Assets Liabilities- assets
Gains and Losses
Noncurrent assets
Accounting Equation
Stockholders
6. Total liabilities/ Total assets reveals the proportion of assets financed with debt and solvency
Debt Ratio
Gross Profit Margin
Return on Equity
Cash and Cash equivalents
7. Carries a dividend rate which must be paid to preferred stockholders before any dividends can be paid to common stockholders
Earnings per share
Publicly traded
Preferred stock
SEC
8. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Income Statement
PCAOB
Revenues
CPAS
9. Entities owning shares of stock are the owners of the corporation
Stockholders' Equity
Stockholders
Common size income statement
Solvency ratios
10. Provides a snapshot of a company's financial position as of a certain date
Income Statement
Balance Sheet
Television costs
Expenses
11. Licensed by the state/conduct audits
Operating Income
Stock options
Current ratio
CPAS
12. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Current ratio
Liquidity
Price earnings ratio
Nonrecurring items
13. Cash - Accounts Recievable - Inventory
Productivity
Publicly traded
Example of Current Asset
Times Interest Earned Ration
14. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company
Dividend rate
Gross Profit Margin
Trend index
Return on Common Equity
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
Statement of Stockholders equity
Return on Equity
Solvency
Debtor
16. States that companies should record assets and services at their acquisition cost - the amount paid for them - because this is the most reliable information
Recievables
Sales
Contributed capital (ending)
Historical cost principle
17. This is what it costs to produce a product or provide a service
Debtor
Cost of Goods Sold(COGS)
Accumulated Depreciation
Historical cost principle
18. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Accounts Payable
Contributed Capital
Revenue Recognition Principle
Basic earnings per share
19. Annual common stock dividends paid/average number of common shares outstanding - amount of dividends paid annually for each share of stock held by investors
Dividend rate
Depreciation Expense
Financial Leverage
Earnings per share
20. Operating Income/Interest Expense - compares the amount of income available to make interest payments to interest payment requirements
Times Interest Earned Ration
Dividend rate
Income Statement
Balance Sheet
21. Companies divide net income by the actual average number of common shares outstanding
Publicly traded
Productivity
Basic earnings per share
Gross Profit Margin
22. Amounts recieved from customers for products sold or services provided
CPAS
Revenues
Noncurrent assets
Debt Ratio
23. Monies to be recieved by the company from customers
PCAOB
Recievables
Contributed capital (ending)
Operating Income
24. Refer to revenues from the sale of merchandise
SEC
Inventories
Sales
Treasury stock
25. When a company sells stock to the public for the first time as a publicly traded corporation
Preferred stock
Initial Public Offering (IPO)
Cash- Basis Accounting
Productivity
26. Amounts that the corporation must pay to suppliers in the future
Expenses
Stock splits
Accounts Payable
Accounts recievable
27. Attest to whether a company's financial statements comply with the GAAP rules
Retained earnings(ending)
Market value per share
Liquidity ratios
Audits
28. Cost of television programs that will be aired during the next year
Retained Earnings
Extraordinary items
Shares Outstanding
Television costs
29. Measures how efficiently you can generate desired outputs from given inputs
Basic earnings per share
Operating activities
Productivity
Retained Earnings
30. Retained earnings + Net Income - (Dividends)
Retained Earnings
Shares Outstanding
Retained earnings(ending)
Discontinued Operations
31. Stock market trading price of the company's common stock
Market value per share
Balance Sheet
Accrual Accounting
Preferred stock
32. 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
Initial Public Offering (IPO)
Accounts Payable
Financial Leverage
Television costs
33. Revenues-Expenses
Financial Leverage
Cash and Cash equivalents
Vertical common size balance sheet
Net Income
34. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans
Return on Sales
Contributed Capital
Solvency ratios
Accumulated other comprehensive income
35. Assets=
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36. Expected to be converted into cash - sold - or consumed within the next 12 months
Financing activities
Contributed capital (ending)
Current assets
Expenses
37. Amounts paid by stockholders to purchase common stock and preferred stock
Contributed Capital
Times Interest Earned Ration
Income Statement
Recievables
38. Portion of assets the owners are free and clear of any liabilities
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39. Defines ethical behavior code of professional conduct
Vertical common size income statement
GAAP
Gross Profit Margin
AICPAs
40. Relate to a company's main business: selling products or services to earn net income
Net Income
Audits
Operating activities
Return on Asset
41. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Intangible assets
Accounting Equation
Accrual Accounting
Expenses
42. Shares are bought and sold on stock exchanges such as the New york stock exchange
Nonrecurring items
Publicly traded
Historical cost principle
CPAS
43. Expresses each income statement item as a percentage of sales
Gross Profit Margin
Liquidity ratios
Stockholders
Vertical common size income statement
44. Subtracting operating expenses from gross profit (Income from Operations)
Operating Income
Contributed capital (ending)
Dividend rate
Historical cost principle
45. Reports the company's profitability during an accounting period
Common-size balance sheet
Return on Common Equity
Cost of Goods Sold(COGS)
Income Statement
46. Extra value that is recorded when buying another company
Goodwill
PCAOB
Gross Profit Margin
Stock splits
47. Reports cash inflows + cash outflows during an accounting period
Statement of cash flows
Times Interest Earned Ration
Contributed Capital
Stock options
48. Market price per share/EPS - to measure how expensive a company's stock is compared to EPS
Net Sales
Price earnings ratio
Return on Sales
CPAS
49. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares
Asset
Price earnings ratio
Productivity
Contributed capital (ending)
50. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Contributed capital (ending)
Financial Leverage
Statement of cash flows
Income Statement