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






2. Extra value that is recorded when buying another company






3. Monies to be recieved by the company from customers






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






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






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






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






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






9. Cost of bringing in revenues






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






11. Proportional increases in the number of shares outstanding






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






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






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






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






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






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






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






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






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






21. Firm's ability to satisfy long term debt






22. A legal value assigned to each share of stock






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






24. Costs incurred to produce revenues






25. Firm's ability to satisfy short term debt






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






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






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






29. All assets not listed as current






30. Amounts to be recieved in the future from customers






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






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






33. Equals the difference between revenues and cost of sales






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






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






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

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






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






39. Licensed by the state/conduct audits






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






41. Refer to revenues from the sale of merchandise






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






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






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






45. Revenues-Expenses






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






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






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






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






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