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






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






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






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






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






6. Revenues-Expenses






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






8. Provides a snapshot of a company's financial position as of a certain date






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






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






11. Merchandise held for sale to customers






12. 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






13. Smaller proportional increases in the number of shares outstanding






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






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






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






17. Defines ethical behavior code of professional conduct






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






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






20. Assets=

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






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






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






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






25. Cost allocated to each year of the assets life






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

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






28. Due after 12 months






29. Entity loaning the money records a bond recievable






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






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






32. Borrowing corporation records bonds payable






33. Licensed by the state/conduct audits






34. Expresses each balance sheet item as a percentage of total assets






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






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






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






38. All assets not listed as current






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






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






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






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






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






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






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






46. Extra value that is recorded when buying another company






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






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






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






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