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. Cost of bringing in revenues






2. Monies to be recieved by the company from customers






3. Firm's ability to satisfy short term debt






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






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






6. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income






7. Retained earnings + Net Income - (Dividends)






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






9. Extra value that is recorded when buying another company






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






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






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






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






14. Proportional increases in the number of shares outstanding






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






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






17. Cost allocated to each year of the assets life






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






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






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






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






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






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






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






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






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






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






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






30. Due after 12 months






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






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






33. Licensed by the state/conduct audits






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






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






36. Cash - Accounts Recievable - Inventory






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






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






39. Records transactions when cash is recieved or paid






40. 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






41. Costs incurred to produce revenues






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






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






44. Amounts to be recieved in the future from customers






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






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






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






48. Portion of assets the owners are free and clear of any liabilities

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






50. Firm's ability to satisfy long term debt