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






2. Smaller proportional increases in the number of shares outstanding






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






4. Records transactions when cash is recieved or paid






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






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






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






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






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






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






11. Licensed by the state/conduct audits






12. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due






13. Cash - Accounts Recievable - Inventory






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






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






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






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






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






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






20. Operating Income/Interest Expense - compares the amount of income available to make interest payments to interest payment requirements






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






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






23. Monies to be recieved by the company from customers






24. Refer to revenues from the sale of merchandise






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






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






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






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






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






30. Retained earnings + Net Income - (Dividends)






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






32. 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






33. Revenues-Expenses






34. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans






35. Assets=

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






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






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

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39. Defines ethical behavior code of professional conduct






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






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






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






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






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






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






46. Extra value that is recorded when buying another company






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






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






49. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares






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