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Financial Statements

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members






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






3. Are liabilities due within 12 months






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






5. Firm's ability to satisfy long term debt






6. Cost allocated to each year of the assets life






7. Refer to revenues from the sale of merchandise






8. Equals the difference between revenues and cost of sales






9. Licensed by the state/conduct audits






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






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






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






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






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






15. Retained earnings + Net Income - (Dividends)






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






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






18. Firm's ability to satisfy short term debt






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






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






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






22. Merchandise held for sale to customers






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






24. Borrowing corporation records bonds payable






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






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






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






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






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






30. Cost of bringing in revenues






31. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)






32. Entity loaning the money records a bond recievable






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






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






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






36. 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






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






38. Defines ethical behavior code of professional conduct






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






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






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






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






43. Smaller proportional increases in the number of shares outstanding






44. Measures how efficiently you can generate desired outputs from given inputs






45. Costs incurred to produce revenues






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






47. Due after 12 months






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






49. 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






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