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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. Cost of bringing in revenues
Productivity
Expenses
liabilities + stockholders' equity
Liquidity ratios
2. Monies to be recieved by the company from customers
Basic earnings per share
liabilities + stockholders' equity
Recievables
Operating Expenses
3. Firm's ability to satisfy short term debt
Intangible assets
Liquidity ratios
Stock dividends
Common size income statement
4. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares
Asset
Creditor
Retained earnings(ending)
AICPAs
5. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue
Operating Expenses
Cash and Cash equivalents
Market value per share
Gross Profit Margin
6. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income
Accounts recievable
CPAS
Stockholders
Return on Equity
7. Retained earnings + Net Income - (Dividends)
Financing activities
Gross Profit
PCAOB
Retained earnings(ending)
8. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Accounts recievable
Accrual Accounting
Inventories
Basic earnings per share
9. Extra value that is recorded when buying another company
Operating activities
Goodwill
Stock options
Vertical common size balance sheet
10. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance
Price earnings ratio
Return on Common Equity
Asset Turnover
Productivity
11. Net Income/Sales Revenue measures the profitability of each dollar of revenue
Return on Sales
Stock options
Intangible assets
Stockholders
12. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself
Treasury stock
Stock options
Solvency
Revenue Recognition Principle
13. Assets- Liabilitie+ Equity OR Assets Liabilities- assets
Expenses
Stock options
Accounting Equation
Debt Ratio
14. Proportional increases in the number of shares outstanding
Preferred stock
Par value
Stock splits
Stockholders
15. Indicate that returns or discounts were subtracted from total sales
Accounts Payable
Expenses
Net Sales
Common size income statement
16. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members
Recievables
Debt Ratio
FASB
Cost of Goods Sold
17. Cost allocated to each year of the assets life
PCAOB
Revenues
Financing activities
Depreciation Expense
18. Rules that management must follow when preparing financial statements available to investors
Basic earnings per share
GAAP
Investing activities
Noncurrent assets
19. Recorded when a company closes down or sells part of its business
Expenses
Financial Leverage
Stock dividends
Discontinued Operations
20. Cost of television programs that will be aired during the next year
Financing activities
CPAS
Television costs
Liquidity ratios
21. Amounts recieved from customers for products sold or services provided
Statement of Stockholders equity
Revenues
Nonrecurring items
Financial Leverage
22. Patents - trademarks - and copyrights that have value but not any physical presence
Debt Ratio
Return on Asset
Intangible assets
Common size income statement
23. Reports the company's profitability during an accounting period
Revenues
AICPAs
Creditor
Income Statement
24. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company
Discontinued Operations
Trend index
Liquidity
Depreciation Expense
25. Annual common stock dividends paid/average number of common shares outstanding - amount of dividends paid annually for each share of stock held by investors
Accounting Equation
Dividend rate
Example of Current Asset
Stockholders' Equity
26. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Return on Sales
Treasury stock
Revenues
Extraordinary items
27. Relate to how a company finances its assets with debt or stockholders' equity
liabilities + stockholders' equity
FASB
Financing activities
Times Interest Earned Ration
28. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Revenue Recognition Principle
Operating Expenses
Return on Sales
Dividend rate
29. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Discontinued Operations
Investing activities
PCAOB
Current liabilites
30. Due after 12 months
Accounts recievable
Creditor
Times Interest Earned Ration
Noncurrent liabilities
31. Sales revenue/ total assets measures how efficiently the company uses assets to generate revenue
Price earnings ratio
Investing activities
Times Interest Earned Ration
Asset Turnover
32. When a company sells stock to the public for the first time as a publicly traded corporation
PCAOB
Net Sales
Initial Public Offering (IPO)
Expenses
33. Licensed by the state/conduct audits
Debt Ratio
CPAS
Common size income statement
Nonrecurring items
34. Total amount of depreciation expensed since the assets' date of purchase
Stock options
Gains and Losses
Accumulated Depreciation
Discontinued Operations
35. Subtracting operating expenses from gross profit (Income from Operations)
Price earnings ratio
SEC
Operating Income
Liquidity ratios
36. Cash - Accounts Recievable - Inventory
Stock options
Example of Current Asset
Net Sales
Revenue Recognition Principle
37. Amounts that the corporation must pay to suppliers in the future
Depreciation Expense
Accounts recievable
Accounts Payable
Inventories
38. Attest to whether a company's financial statements comply with the GAAP rules
Television costs
Audits
GAAP
Net Sales
39. Records transactions when cash is recieved or paid
Net Sales
Liquidity
Preferred stock
Cash- Basis Accounting
40. 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
Financial Leverage
Current ratio
Income Statement
Accrual Accounting
41. Costs incurred to produce revenues
Debtor
Solvency
Extraordinary items
Expenses
42. Amounts paid by stockholders to purchase common stock and preferred stock
Return on Asset
Asset Turnover
Contributed Capital
Cash and Cash equivalents
43. Carries a dividend rate which must be paid to preferred stockholders before any dividends can be paid to common stockholders
Basic earnings per share
Cost of Goods Sold(COGS)
Cash and Cash equivalents
Preferred stock
44. Amounts to be recieved in the future from customers
Audits
Debtor
PCAOB
Accounts recievable
45. Relate to a company's main business: selling products or services to earn net income
Contributed Capital
Operating activities
Vertical common size income statement
Trend index
46. Net Income/ total assets reveals how efficiently assets are used to generate profit
Return on Asset
Accumulated other comprehensive income
Stock options
Investing activities
47. legislative authority to set the reporting rules for accounting info of publicly held corporations
Retained earnings(ending)
SEC
Inventories
FASB
48. Portion of assets the owners are free and clear of any liabilities
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49. A company's ability to pay liabilities as they come due in the next year
Liquidity
Goodwill
Television costs
Horizontal common size statement
50. Firm's ability to satisfy long term debt
Solvency
Solvency ratios
Operating Expenses
Accumulated other comprehensive income