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






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






3. Merchandise held for sale to customers






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






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






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






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






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






9. Extra value that is recorded when buying another company






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






11. Costs incurred to produce revenues






12. Carries a dividend rate which must be paid to preferred stockholders before any dividends can be paid to common stockholders






13. Refer to revenues from the sale of merchandise






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






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






16. All assets not listed as current






17. Retained earnings + Net Income - (Dividends)






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






19. Annual common stock dividends paid/average number of common shares outstanding - amount of dividends paid annually for each share of stock held by investors






20. Assets=

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






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






23. Compares all amounts within one year to revenue of that same year






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






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






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






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






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






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






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






31. Proportional increases in the number of shares outstanding






32. Records transactions when cash is recieved or paid






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






34. Firm's ability to satisfy long term debt






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






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






38. A legal value assigned to each share of stock






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






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






41. Cash - Accounts Recievable - Inventory






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






43. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due






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






45. Are liabilities due within 12 months






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






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






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






49. Amounts to be recieved in the future from customers






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