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. Costs incurred to produce revenues






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






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






4. Recorded when a company closes down or sells part of its business






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






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






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






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






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






10. Are liabilities due within 12 months






11. A company's ability to pay liabilities as they come due in the next year






12. Smaller proportional increases in the number of shares outstanding






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






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






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






16. Entity loaning the money records a bond recievable






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






18. Merchandise held for sale to customers






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






20. Cost of bringing in revenues






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






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






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






24. Retained earnings + Net Income - (Dividends)






25. Firm's ability to satisfy long term debt






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

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27. Extra value that is recorded when buying another company






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






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






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






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






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






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






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






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






36. Proportional increases in the number of shares outstanding






37. Revenues-Expenses






38. Records transactions when cash is recieved or paid






39. 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






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






41. Borrowing corporation records bonds payable






42. Due after 12 months






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






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






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






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






47. Equals the difference between revenues and cost of sales






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






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






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