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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. Borrowing corporation records bonds payable
Debtor
Publicly traded
Balance Sheet
Times Interest Earned Ration
2. Assets- Liabilitie+ Equity OR Assets Liabilities- assets
Cash- Basis Accounting
Horizontal common size statement
Sales
Accounting Equation
3. Revenues-Expenses
Net Income
Market value per share
Earnings per share
Stock dividends
4. Expresses each balance sheet item as a percentage of total assets
Vertical common size balance sheet
Revenue Recognition Principle
Accounting Equation
Trend index
5. Records transactions when cash is recieved or paid
Stockholders' Equity
Cash- Basis Accounting
Price earnings ratio
Earnings per share
6. Extra value that is recorded when buying another company
Goodwill
Operating activities
Vertical common size income statement
Cash- Basis Accounting
7. Monies to be recieved by the company from customers
Dividend rate
Asset
Recievables
Market value per share
8. Recorded when a company closes down or sells part of its business
Preferred stock
Extraordinary items
Operating Expenses
Discontinued Operations
9. Subtracting operating expenses from gross profit (Income from Operations)
Historical cost principle
Operating Income
Return on Common Equity
Cash- Basis Accounting
10. Cost allocated to each year of the assets life
Publicly traded
Revenue Recognition Principle
Depreciation Expense
Goodwill
11. Patents - trademarks - and copyrights that have value but not any physical presence
Intangible assets
GAAP
Revenue Recognition Principle
Goodwill
12. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Gross Profit
PCAOB
Return on Common Equity
Accumulated other comprehensive income
13. Are liabilities due within 12 months
Current liabilites
Television costs
Statement of cash flows
Example of Current Asset
14. Expresses each income statement item as a percentage of sales
Vertical common size income statement
Treasury stock
Initial Public Offering (IPO)
Cash- Basis Accounting
15. When a company sells stock to the public for the first time as a publicly traded corporation
Cash- Basis Accounting
Initial Public Offering (IPO)
Operating Expenses
Vertical common size balance sheet
16. Largest expense item which reports the wholesale costs of inventory sold during the accounting period
Par value
Asset Turnover
Cost of Goods Sold
Debtor
17. Entities owning shares of stock are the owners of the corporation
AICPAs
Nonrecurring items
Stockholders
Financial Leverage
18. Amounts to be recieved in the future from customers
Statement of Stockholders equity
Accounts recievable
Vertical common size balance sheet
Liquidity
19. Contracts that give their holders the right to buy or sell shares of stock at a certain market price
FASB
Stock options
Income Statement
Financial Leverage
20. Includes all costs of generating sales besides cost of sales
Discontinued Operations
Operating Expenses
Expenses
Debtor
21. Compares all amounts within one year to revenue of that same year
Initial Public Offering (IPO)
PCAOB
Common size income statement
Stock options
22. Firm's ability to satisfy short term debt
Initial Public Offering (IPO)
Liquidity ratios
Audits
Trend index
23. This is what it costs to produce a product or provide a service
Cost of Goods Sold(COGS)
Expenses
Sales
Current liabilites
24. Rules that management must follow when preparing financial statements available to investors
Stock options
GAAP
FASB
Return on Sales
25. 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
Stock splits
Nonrecurring items
SEC
26. Compares all amounts within on year to total assets of that same year
Productivity
Initial Public Offering (IPO)
Expenses
Common-size balance sheet
27. Stock market trading price of the company's common stock
Stock dividends
Market value per share
Creditor
Stockholders
28. Total liabilities/ Total assets reveals the proportion of assets financed with debt and solvency
Debt Ratio
SEC
Vertical common size balance sheet
Operating Income
29. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company
Audits
Extraordinary items
Trend index
Nonrecurring items
30. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members
Stock dividends
Expenses
FASB
Historical cost principle
31. 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
Nonrecurring items
Financial Leverage
Income Statement
FASB
32. Amounts recieved from customers for products sold or services provided
Revenues
Recievables
FASB
Financing activities
33. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Asset
Recievables
Revenue Recognition Principle
Financing activities
34. 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
SEC
Net Income
Accounts recievable
Statement of Stockholders equity
35. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue
Historical cost principle
Current ratio
Gross Profit Margin
Statement of Stockholders equity
36. Cost of television programs that will be aired during the next year
Treasury stock
Television costs
Retained earnings(ending)
Example of Current Asset
37. Proportional increases in the number of shares outstanding
Shares Outstanding
Publicly traded
Extraordinary items
Stock splits
38. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income
Return on Equity
Price earnings ratio
Return on Sales
Stockholders
39. Cash - Accounts Recievable - Inventory
Example of Current Asset
Depreciation Expense
Investing activities
Financial Leverage
40. legislative authority to set the reporting rules for accounting info of publicly held corporations
Gains and Losses
Cost of Goods Sold(COGS)
Audits
SEC
41. Refer to revenues from the sale of merchandise
Cash and Cash equivalents
Preferred stock
Extraordinary items
Sales
42. Expected to be converted into cash - sold - or consumed within the next 12 months
Stockholders' Equity
Publicly traded
Current assets
Extraordinary items
43. Defines ethical behavior code of professional conduct
AICPAs
Asset
Operating Income
Retained earnings(ending)
44. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Operating activities
Current ratio
Balance Sheet
Solvency
45. Reports cash inflows + cash outflows during an accounting period
Accumulated other comprehensive income
GAAP
Financial Leverage
Statement of cash flows
46. Portion of assets the owners are free and clear of any liabilities
47. Net Income/Sales Revenue measures the profitability of each dollar of revenue
Common-size balance sheet
Return on Sales
Publicly traded
Stockholders
48. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement
Creditor
Audits
Accounts recievable
Nonrecurring items
49. States that companies should record assets and services at their acquisition cost - the amount paid for them - because this is the most reliable information
Gains and Losses
Historical cost principle
Debt Ratio
Net Sales
50. Total amount of depreciation expensed since the assets' date of purchase
Operating activities
Solvency ratios
Cost of Goods Sold
Accumulated Depreciation