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






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






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






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






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






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






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






8. Retained earnings + Net Income - (Dividends)






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






10. Borrowing corporation records bonds payable






11. A legal value assigned to each share of stock






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






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. Due after 12 months






15. 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






16. Extra value that is recorded when buying another company






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






18. Assets=

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19. Cash - Accounts Recievable - Inventory






20. Refer to revenues from the sale of merchandise






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






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






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






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






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






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






27. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares






28. Are liabilities due within 12 months






29. Records transactions when cash is recieved or paid






30. Total amount of depreciation expensed since the assets' date of purchase






31. Total liabilities/ Total assets reveals the proportion of assets financed with debt and solvency






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






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






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






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






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






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






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






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






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






41. Relate to the need for investing in property - plant - and equipment or expanding by making investments in other companies






42. Amounts that the corporation must pay to suppliers in the future






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






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






46. Smaller proportional increases in the number of shares outstanding






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






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






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






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