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. Defines ethical behavior code of professional conduct






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






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






4. A legal value assigned to each share of stock






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






6. Assets=

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7. Cost allocated to each year of the assets life






8. Compares all amounts within one year to revenue of that same year






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






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






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






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






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






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






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






16. Cash - Accounts Recievable - Inventory






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






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






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






20. 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






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






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






23. Extra value that is recorded when buying another company






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






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






26. Records transactions when cash is recieved or paid






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






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






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






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






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






32. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself






33. Equals the difference between revenues and cost of sales






34. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard






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






36. Largest expense item which reports the wholesale costs of inventory sold during the accounting period






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






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






39. Amounts to be recieved in the future from customers






40. Are liabilities due within 12 months






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






42. Actual currency - bank accounts - and investments that can be liquidated immediately






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






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






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






46. Cost of bringing in revenues






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






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

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49. Firm's ability to satisfy long term debt






50. Costs incurred to produce revenues