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Test your basic knowledge |
Financial Statements
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Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Current ratio
Statement of cash flows
Initial Public Offering (IPO)
liabilities + stockholders' equity
2. Retained earnings + Net Income - (Dividends)
PCAOB
Return on Asset
Retained earnings(ending)
Return on Sales
3. Reports the company's profitability during an accounting period
Treasury stock
Cost of Goods Sold
Income Statement
Inventories
4. Borrowing corporation records bonds payable
Debtor
Sales
Vertical common size income statement
Common-size balance sheet
5. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance
Intangible assets
Return on Common Equity
Revenue Recognition Principle
Statement of Stockholders equity
6. Measures how efficiently you can generate desired outputs from given inputs
Trend index
Productivity
Treasury stock
Common-size balance sheet
7. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard
Accounts recievable
Example of Current Asset
Horizontal common size statement
Gross Profit
8. Market price per share/EPS - to measure how expensive a company's stock is compared to EPS
Liquidity
Recievables
Price earnings ratio
Accumulated other comprehensive income
9. Subtracting operating expenses from gross profit (Income from Operations)
FASB
Statement of Stockholders equity
Operating Income
Discontinued Operations
10. Due after 12 months
Noncurrent liabilities
liabilities + stockholders' equity
Nonrecurring items
Balance Sheet
11. legislative authority to set the reporting rules for accounting info of publicly held corporations
Asset
Net Sales
SEC
Discontinued Operations
12. Monies to be recieved by the company from customers
Contributed Capital
Financing activities
Stockholders
Recievables
13. Entity loaning the money records a bond recievable
Stockholders' Equity
Creditor
GAAP
Intangible assets
14. Amounts recieved from customers for products sold or services provided
Noncurrent liabilities
Revenues
Current ratio
Goodwill
15. Net Income/ total assets reveals how efficiently assets are used to generate profit
Return on Asset
Nonrecurring items
Statement of Stockholders equity
Accounting Equation
16. Cost allocated to each year of the assets life
Audits
Contributed capital (ending)
Depreciation Expense
Intangible assets
17. Shares are bought and sold on stock exchanges such as the New york stock exchange
Accounts recievable
Nonrecurring items
Publicly traded
Creditor
18. Expected to be converted into cash - sold - or consumed within the next 12 months
Current assets
Net Sales
Income Statement
Common-size balance sheet
19. Recorded when a company closes down or sells part of its business
Accrual Accounting
Retained earnings(ending)
Discontinued Operations
Stock dividends
20. Amounts to be recieved in the future from customers
Accounts recievable
Recievables
Example of Current Asset
Common size income statement
21. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income
Gross Profit
Return on Equity
Vertical common size income statement
Revenues
22. A legal value assigned to each share of stock
Accounts Payable
Stock dividends
Par value
Earnings per share
23. Patents - trademarks - and copyrights that have value but not any physical presence
Accumulated other comprehensive income
Accrual Accounting
Accounts Payable
Intangible assets
24. Contracts that give their holders the right to buy or sell shares of stock at a certain market price
Price earnings ratio
Retained earnings(ending)
Preferred stock
Stock options
25. A company's ability to pay liabilities as they come due in the next year
Gross Profit
Return on Sales
Liquidity
Basic earnings per share
26. Amounts paid by stockholders to purchase common stock and preferred stock
Financial Leverage
Accrual Accounting
Contributed Capital
Example of Current Asset
27. Assets=
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28. Cost of bringing in revenues
Expenses
Extraordinary items
Depreciation Expense
Debt Ratio
29. Portion of assets the owners are free and clear of any liabilities
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30. Extra value that is recorded when buying another company
Financial Leverage
Goodwill
Net Sales
Recievables
31. Records transactions when cash is recieved or paid
Cash- Basis Accounting
Return on Equity
Vertical common size balance sheet
Common size income statement
32. Cost of television programs that will be aired during the next year
Television costs
Common-size balance sheet
Stock options
Cost of Goods Sold(COGS)
33. Provides a snapshot of a company's financial position as of a certain date
Solvency
Balance Sheet
SEC
Trend index
34. Defines ethical behavior code of professional conduct
AICPAs
Stockholders
Treasury stock
Nonrecurring items
35. Equals the difference between revenues and cost of sales
Accounts recievable
Productivity
Gross Profit
SEC
36. Relate to how a company finances its assets with debt or stockholders' equity
CPAS
Financing activities
Stock splits
Times Interest Earned Ration
37. Smaller proportional increases in the number of shares outstanding
Cash and Cash equivalents
Stock dividends
Statement of cash flows
Net Sales
38. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company
Debtor
Return on Common Equity
Asset Turnover
Trend index
39. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement
Nonrecurring items
Gains and Losses
Stockholders' Equity
Times Interest Earned Ration
40. Compares all amounts within one year to revenue of that same year
Sales
Common size income statement
Productivity
Accounting Equation
41. Relate to a company's main business: selling products or services to earn net income
AICPAs
Operating Income
Operating activities
Basic earnings per share
42. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares
Shares Outstanding
Return on Asset
Accumulated other comprehensive income
Earnings per share
43. Reports cash inflows + cash outflows during an accounting period
Initial Public Offering (IPO)
Recievables
Productivity
Statement of cash flows
44. Attest to whether a company's financial statements comply with the GAAP rules
Financing activities
Audits
Contributed capital (ending)
Trend index
45. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Accrual Accounting
Dividend rate
Debt Ratio
Accumulated other comprehensive income
46. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue
Times Interest Earned Ration
Cash and Cash equivalents
Revenue Recognition Principle
Gross Profit Margin
47. Indicate that returns or discounts were subtracted from total sales
Statement of cash flows
Expenses
Vertical common size balance sheet
Net Sales
48. Sales revenue/ total assets measures how efficiently the company uses assets to generate revenue
Asset Turnover
Liquidity ratios
Revenues
Retained Earnings
49. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors
Earnings per share
Stock dividends
Solvency
Asset
50. Expresses each balance sheet item as a percentage of total assets
Vertical common size balance sheet
Current liabilites
Return on Asset
Productivity
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