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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. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares






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






3. Merchandise held for sale to customers






4. Firm's ability to satisfy long term debt






5. 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






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






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






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

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






10. Equals the difference between revenues and cost of sales






11. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance






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






13. Costs incurred to produce revenues






14. Amounts to be recieved in the future from customers






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






16. Refer to revenues from the sale of merchandise






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






18. Monies to be recieved by the company from customers






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






20. Extra value that is recorded when buying another company






21. Defines ethical behavior code of professional conduct






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






23. Records transactions when cash is recieved or paid






24. Licensed by the state/conduct audits






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






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






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






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






29. Borrowing corporation records bonds payable






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






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






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






33. Compares all amounts within one year to revenue of that same year






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






35. Attest to whether a company's financial statements comply with the GAAP rules






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






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






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






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






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






41. States that companies should record assets and services at their acquisition cost - the amount paid for them - because this is the most reliable information






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






43. Are liabilities due within 12 months






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






45. Cost allocated to each year of the assets life






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






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






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






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






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