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






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






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






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






6. Firm's ability to satisfy long term debt






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






8. Monies to be recieved by the company from customers






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






10. Extra value that is recorded when buying another company






11. Revenues-Expenses






12. A legal value assigned to each share of stock






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






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






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






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






17. Cash - Accounts Recievable - Inventory






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






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






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






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






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






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






24. Refer to revenues from the sale of merchandise






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






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






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






28. Cost of bringing in revenues






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






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






31. Proportional increases in the number of shares outstanding






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






33. All assets not listed as current






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






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






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






37. Records transactions when cash is recieved or paid






38. Cost allocated to each year of the assets life






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






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






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






42. 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






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






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






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






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






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






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






49. Due after 12 months






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







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