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






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






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






4. Cost of television programs that will be aired during the next year






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






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






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






8. Retained earnings + Net Income - (Dividends)






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






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






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






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






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






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






15. Equals the difference between revenues and cost of sales






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






17. Records transactions when cash is recieved or paid






18. Cash - Accounts Recievable - Inventory






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






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






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






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






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






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






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






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






27. Due after 12 months






28. Amounts recieved from customers for products sold or services provided






29. All assets not listed as current






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






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






32. Costs incurred to produce revenues






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






34. Cost of bringing in revenues






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






36. Firm's ability to satisfy short term debt






37. Amounts to be recieved in the future from customers






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






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






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






41. Cost allocated to each year of the assets life






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. Assets=

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






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






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






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






48. Refer to revenues from the sale of merchandise






49. Provides a snapshot of a company's financial position as of a certain date






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