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






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






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






4. Smaller proportional increases in the number of shares outstanding






5. Extra value that is recorded when buying another company






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






7. Firm's ability to satisfy long term debt






8. Equals the difference between revenues and cost of sales






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






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






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






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






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






14. Revenues-Expenses






15. Borrowing corporation records bonds payable






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






17. Records transactions when cash is recieved or paid






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






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






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






21. Cost of bringing in revenues






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






23. Firm's ability to satisfy short term debt






24. Licensed by the state/conduct audits






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






26. Refer to revenues from the sale of merchandise






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






28. Compares all amounts within on year to total assets of that same year






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






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






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






32. Due after 12 months






33. Costs incurred to produce revenues






34. A legal value assigned to each share of stock






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






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






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






38. Defines ethical behavior code of professional conduct






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






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






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






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






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






44. Cash - Accounts Recievable - Inventory






45. All assets not listed as current






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






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






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






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






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