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Test your basic knowledge |
Financial Statements
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Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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Match each statement with the correct term.
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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. Total amount of depreciation expensed since the assets' date of purchase
Audits
Net Income
Operating activities
Accumulated Depreciation
2. Smaller proportional increases in the number of shares outstanding
Sales
Retained Earnings
Stock dividends
Operating Income
3. Arise from the sale of long-lived assets or investments
Gains and Losses
Goodwill
Stock splits
Solvency
4. Attest to whether a company's financial statements comply with the GAAP rules
Market value per share
Treasury stock
Audits
Cash and Cash equivalents
5. Relate to how a company finances its assets with debt or stockholders' equity
Trend index
Operating activities
Financing activities
Historical cost principle
6. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Return on Equity
PCAOB
Retained earnings(ending)
Inventories
7. Largest expense item which reports the wholesale costs of inventory sold during the accounting period
Common size income statement
Cost of Goods Sold
Statement of Stockholders equity
Sales
8. Proportional increases in the number of shares outstanding
Balance Sheet
Stock splits
Retained Earnings
Noncurrent liabilities
9. Assets- Liabilitie+ Equity OR Assets Liabilities- assets
Operating Income
Nonrecurring items
Accounting Equation
Dividend rate
10. A legal value assigned to each share of stock
Investing activities
Inventories
Par value
CPAS
11. Compares all amounts within one year to revenue of that same year
AICPAs
Noncurrent assets
Expenses
Common size income statement
12. Licensed by the state/conduct audits
Common-size balance sheet
Inventories
CPAS
Financing activities
13. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans
GAAP
Cost of Goods Sold
Accumulated other comprehensive income
Creditor
14. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company
Trend index
Stock options
Cash and Cash equivalents
Statement of Stockholders equity
15. Sales revenue/ total assets measures how efficiently the company uses assets to generate revenue
Asset Turnover
Sales
Cash- Basis Accounting
Cost of Goods Sold
16. Compares all amounts within on year to total assets of that same year
GAAP
Cost of Goods Sold
Common-size balance sheet
Current ratio
17. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard
Asset
Return on Common Equity
Shares Outstanding
Horizontal common size statement
18. Monies to be recieved by the company from customers
Expenses
Return on Common Equity
Extraordinary items
Recievables
19. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself
Treasury stock
Historical cost principle
Shares Outstanding
Investing activities
20. Annual common stock dividends paid/average number of common shares outstanding - amount of dividends paid annually for each share of stock held by investors
Dividend rate
Vertical common size balance sheet
Discontinued Operations
liabilities + stockholders' equity
21. 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
Depreciation Expense
Stockholders
Statement of Stockholders equity
22. Provides a snapshot of a company's financial position as of a certain date
Common-size balance sheet
Balance Sheet
Accounts Payable
AICPAs
23. Firm's ability to satisfy long term debt
Solvency ratios
Revenues
Net Sales
Cash- Basis Accounting
24. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors
Nonrecurring items
Gross Profit
Expenses
Earnings per share
25. Rules that management must follow when preparing financial statements available to investors
Intangible assets
Common size income statement
Accounting Equation
GAAP
26. A company's ability to pay liabilities for many years into the future
Earnings per share
Accumulated Depreciation
Operating Expenses
Solvency
27. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Treasury stock
Current ratio
Vertical common size income statement
Expenses
28. Entities owning shares of stock are the owners of the corporation
Stockholders
Accumulated Depreciation
Accounts recievable
Times Interest Earned Ration
29. Portion of assets the owners are free and clear of any liabilities
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30. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue
Trend index
Asset Turnover
Statement of cash flows
Gross Profit Margin
31. Defines ethical behavior code of professional conduct
Cost of Goods Sold(COGS)
AICPAs
Trend index
Return on Sales
32. Amounts to be recieved in the future from customers
Accrual Accounting
Liquidity
Trend index
Accounts recievable
33. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares
CPAS
Basic earnings per share
Shares Outstanding
Productivity
34. Amounts paid by stockholders to purchase common stock and preferred stock
Discontinued Operations
Contributed Capital
Statement of cash flows
Par value
35. Firm's ability to satisfy short term debt
Extraordinary items
Liquidity ratios
CPAS
Revenues
36. A company's ability to pay liabilities as they come due in the next year
Solvency ratios
Stock options
Common size income statement
Liquidity
37. Total liabilities/ Total assets reveals the proportion of assets financed with debt and solvency
Gross Profit
Stock options
Debt Ratio
Debtor
38. Expresses each balance sheet item as a percentage of total assets
Vertical common size balance sheet
Intangible assets
Balance Sheet
Inventories
39. Cash - Accounts Recievable - Inventory
Cash and Cash equivalents
Example of Current Asset
Sales
Solvency
40. Relate to the need for investing in property - plant - and equipment or expanding by making investments in other companies
Investing activities
Initial Public Offering (IPO)
Operating Income
Stock dividends
41. Merchandise held for sale to customers
Income Statement
Accumulated other comprehensive income
Inventories
Gross Profit
42. All assets not listed as current
Debtor
Cash- Basis Accounting
Noncurrent assets
Accounts Payable
43. Amounts recieved from customers for products sold or services provided
Retained earnings(ending)
Current ratio
Revenues
Liquidity ratios
44. Reports the company's profitability during an accounting period
Income Statement
Audits
Return on Common Equity
Accrual Accounting
45. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares
Asset
PCAOB
Inventories
Basic earnings per share
46. Retained earnings + Net Income - (Dividends)
Retained earnings(ending)
Sales
Historical cost principle
Creditor
47. Refer to revenues from the sale of merchandise
Sales
Preferred stock
Accounts recievable
Accounting Equation
48. Indicate that returns or discounts were subtracted from total sales
Stock splits
Net Sales
Dividend rate
Noncurrent assets
49. Expresses each income statement item as a percentage of sales
Times Interest Earned Ration
Cost of Goods Sold(COGS)
Stock splits
Vertical common size income statement
50. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Asset Turnover
Noncurrent assets
Contributed capital (ending)
Recievables
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