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

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2. 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






3. Equals the difference between revenues and cost of sales






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






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






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






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






8. Refer to revenues from the sale of merchandise






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






10. Amounts paid by stockholders to purchase common stock and preferred stock






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






12. Licensed by the state/conduct audits






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






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






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






16. Companies divide net income by the actual average number of common shares outstanding






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






18. Defines ethical behavior code of professional conduct






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






20. Cost allocated to each year of the assets life






21. Extra value that is recorded when buying another company






22. Shares are bought and sold on stock exchanges such as the New york stock exchange






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






24. A legal value assigned to each share of stock






25. Amounts recieved from customers for products sold or services provided






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






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






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






29. Firm's ability to satisfy short term debt






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






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






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






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






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






35. 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






36. Retained earnings + Net Income - (Dividends)






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






38. legislative authority to set the reporting rules for accounting info of publicly held corporations






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






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






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






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






43. Entity loaning the money records a bond recievable






44. Attest to whether a company's financial statements comply with the GAAP rules






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






46. Are liabilities due within 12 months






47. Firm's ability to satisfy long term debt






48. Monies to be recieved by the company from customers






49. Annual common stock dividends paid/average number of common shares outstanding - amount of dividends paid annually for each share of stock held by investors






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