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 paid by stockholders to purchase common stock and preferred stock






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






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






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






5. Arise from the sale of long-lived assets or investments






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






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






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






9. Firm's ability to satisfy long term debt






10. Revenues-Expenses






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






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






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






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






15. Amounts to be recieved in the future from customers






16. Rules that management must follow when preparing financial statements available to investors






17. Cash - Accounts Recievable - Inventory






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






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






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






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






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






24. Equals the difference between revenues and cost of sales






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






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






27. Retained earnings + Net Income - (Dividends)






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






29. Defines ethical behavior code of professional conduct






30. Monies to be recieved by the company from customers






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






32. Cost allocated to each year of the assets life






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

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






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






36. Licensed by the state/conduct audits






37. Costs incurred to produce revenues






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






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






40. 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






41. A legal value assigned to each share of stock






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






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






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






45. Are liabilities due within 12 months






46. All assets not listed as current






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






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






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






50. 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