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. 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






2. 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






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






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






5. Firm's ability to satisfy short term debt






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






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






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






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






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






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






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






13. Are liabilities due within 12 months






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






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






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






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






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






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






20. Amounts to be recieved in the future from customers






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






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






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






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






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






26. Borrowing corporation records bonds payable






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






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






29. Refer to revenues from the sale of merchandise






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






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






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






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






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






35. Merchandise held for sale to customers






36. Licensed by the state/conduct audits






37. Proportional increases in the number of shares outstanding






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






39. Assets=


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






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






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






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






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






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






46. Equals the difference between revenues and cost of sales






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






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






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






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