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






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






3. Smaller proportional increases in the number of shares outstanding






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






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






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






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






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






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






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






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






12. Firm's ability to satisfy long term debt






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






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






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






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






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






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






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






20. Compares all amounts within on year to total assets of that same year






21. Stock market trading price of the company's common stock






22. Equals the difference between revenues and cost of sales






23. All assets not listed as current






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






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






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






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






28. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members






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






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






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






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






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






34. Monies to be recieved by the company from customers






35. Refer to revenues from the sale of merchandise






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






37. Annual common stock dividends paid/average number of common shares outstanding - amount of dividends paid annually for each share of stock held by investors






38. Borrowing corporation records bonds payable






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






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






41. Due after 12 months






42. Revenues-Expenses






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






44. Defines ethical behavior code of professional conduct






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






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






47. Costs incurred to produce revenues






48. Cost of bringing in revenues






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






50. Proportional increases in the number of shares outstanding