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Test your basic knowledge |
Financial Statements
Start Test
Study First
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. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Extraordinary items
Revenue Recognition Principle
Price earnings ratio
Contributed capital (ending)
2. When a company sells stock to the public for the first time as a publicly traded corporation
Return on Equity
Income Statement
Accumulated Depreciation
Initial Public Offering (IPO)
3. This is what it costs to produce a product or provide a service
Financial Leverage
Shares Outstanding
Cost of Goods Sold(COGS)
Debt Ratio
4. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Example of Current Asset
Gross Profit Margin
PCAOB
Stock splits
5. Companies divide net income by the actual average number of common shares outstanding
Basic earnings per share
Stock options
GAAP
Example of Current Asset
6. legislative authority to set the reporting rules for accounting info of publicly held corporations
Revenue Recognition Principle
Accounting Equation
Sales
SEC
7. Reports cash inflows + cash outflows during an accounting period
Accounts recievable
Vertical common size income statement
Statement of Stockholders equity
Statement of cash flows
8. Retained earnings + Net Income - (Dividends)
Stockholders
Investing activities
Current liabilites
Retained earnings(ending)
9. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard
Intangible assets
Horizontal common size statement
Revenue Recognition Principle
Discontinued Operations
10. Borrowing corporation records bonds payable
GAAP
Asset Turnover
Earnings per share
Debtor
11. A legal value assigned to each share of stock
Stockholders' Equity
Audits
Preferred stock
Par value
12. Entities owning shares of stock are the owners of the corporation
Vertical common size income statement
Stockholders
Preferred stock
Accumulated Depreciation
13. States that companies should record assets and services at their acquisition cost - the amount paid for them - because this is the most reliable information
Historical cost principle
Trend index
Accounting Equation
Solvency
14. Due after 12 months
Noncurrent liabilities
Revenue Recognition Principle
Debt Ratio
Financial Leverage
15. 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
SEC
Statement of Stockholders equity
Financial Leverage
Operating Income
16. Extra value that is recorded when buying another company
Noncurrent liabilities
Goodwill
Accumulated other comprehensive income
Statement of cash flows
17. Compares all amounts within on year to total assets of that same year
Common-size balance sheet
CPAS
Creditor
Recievables
18. Assets=
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19. Cash - Accounts Recievable - Inventory
Vertical common size balance sheet
Productivity
Net Income
Example of Current Asset
20. Refer to revenues from the sale of merchandise
Current ratio
Gross Profit
Sales
Current assets
21. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Contributed capital (ending)
Accounting Equation
PCAOB
Revenue Recognition Principle
22. Provides a snapshot of a company's financial position as of a certain date
Balance Sheet
Depreciation Expense
Creditor
Nonrecurring items
23. Relate to a company's main business: selling products or services to earn net income
Operating activities
Retained Earnings
GAAP
Net Sales
24. Largest expense item which reports the wholesale costs of inventory sold during the accounting period
Gross Profit
Cost of Goods Sold
Cash- Basis Accounting
Operating Expenses
25. Patents - trademarks - and copyrights that have value but not any physical presence
Contributed Capital
Trend index
Goodwill
Intangible assets
26. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Accrual Accounting
Audits
Net Sales
Asset
27. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares
Shares Outstanding
liabilities + stockholders' equity
Publicly traded
Accrual Accounting
28. Are liabilities due within 12 months
Debt Ratio
Current liabilites
Solvency ratios
Balance Sheet
29. Records transactions when cash is recieved or paid
Cash- Basis Accounting
Accumulated other comprehensive income
Shares Outstanding
Liquidity
30. Total amount of depreciation expensed since the assets' date of purchase
Retained Earnings
Accumulated Depreciation
Retained earnings(ending)
Sales
31. Total liabilities/ Total assets reveals the proportion of assets financed with debt and solvency
Retained Earnings
Gross Profit Margin
Debt Ratio
Depreciation Expense
32. Net Income/Sales Revenue measures the profitability of each dollar of revenue
Common size income statement
Vertical common size balance sheet
Depreciation Expense
Return on Sales
33. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares
Stockholders
Cost of Goods Sold(COGS)
Asset
Basic earnings per share
34. Net Income/ total assets reveals how efficiently assets are used to generate profit
Market value per share
Return on Asset
Operating activities
Contributed Capital
35. Indicate that returns or discounts were subtracted from total sales
Basic earnings per share
Accumulated Depreciation
liabilities + stockholders' equity
Net Sales
36. Amounts recieved from customers for products sold or services provided
Preferred stock
Sales
Revenues
Operating Expenses
37. A company's ability to pay liabilities for many years into the future
Solvency
Trend index
Audits
Historical cost principle
38. Relate to how a company finances its assets with debt or stockholders' equity
Gross Profit
Accounts recievable
Common size income statement
Financing activities
39. Subtracting operating expenses from gross profit (Income from Operations)
Stock options
Operating Income
Example of Current Asset
Liquidity ratios
40. Includes all costs of generating sales besides cost of sales
Statement of Stockholders equity
Expenses
Operating Expenses
Goodwill
41. Relate to the need for investing in property - plant - and equipment or expanding by making investments in other companies
Stockholders' Equity
Stock dividends
Goodwill
Investing activities
42. Amounts that the corporation must pay to suppliers in the future
Accounts Payable
Income Statement
Stockholders' Equity
Goodwill
43. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members
FASB
Television costs
PCAOB
Trend index
44. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors
Accounts recievable
Earnings per share
Historical cost principle
Net Income
45. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans
Cash and Cash equivalents
Current liabilites
Accumulated other comprehensive income
liabilities + stockholders' equity
46. Smaller proportional increases in the number of shares outstanding
Stock dividends
Basic earnings per share
Price earnings ratio
Liquidity
47. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself
Basic earnings per share
Common-size balance sheet
Treasury stock
Retained Earnings
48. Sales revenue/ total assets measures how efficiently the company uses assets to generate revenue
Vertical common size income statement
Expenses
Asset Turnover
Revenues
49. Expresses each income statement item as a percentage of sales
Audits
Retained earnings(ending)
Liquidity ratios
Vertical common size income statement
50. Shares are bought and sold on stock exchanges such as the New york stock exchange
Investing activities
Publicly traded
Extraordinary items
Noncurrent liabilities