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. Indicate that returns or discounts were subtracted from total sales






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






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






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






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






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






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






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






9. Due after 12 months






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






11. Smaller proportional increases in the number of shares outstanding






12. Cost of bringing in revenues






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






14. A legal value assigned to each share of stock






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






16. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance






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






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






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






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






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






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






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






24. Firm's ability to satisfy long term debt






25. Costs incurred to produce revenues






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






27. 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






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






29. Total amount of depreciation expensed since the assets' date of purchase






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






31. Equals the difference between revenues and cost of sales






32. Defines ethical behavior code of professional conduct






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






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






35. Net income earned by the company since its incorporation and not yet distributed as dividends






36. Firm's ability to satisfy short term debt






37. Retained earnings + Net Income - (Dividends)






38. Proportional increases in the number of shares outstanding






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






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






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






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






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






44. 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






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






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






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






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






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






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