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






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






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






4. Arise from the sale of long-lived assets or investments






5. Annual common stock dividends paid/average number of common shares outstanding - amount of dividends paid annually for each 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. Stock market trading price of the company's common stock






8. Refer to revenues from the sale of merchandise






9. Are liabilities due within 12 months






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






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






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






13. Firm's ability to satisfy long term debt






14. Monies to be recieved by the company from customers






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






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






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






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






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






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






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






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






23. 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






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






25. All assets not listed as current






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






27. Merchandise held for sale to customers






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






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






30. Equals the difference between revenues and cost of sales






31. Retained earnings + Net Income - (Dividends)






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






33. Licensed by the state/conduct audits






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






35. Assets=

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






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






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






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






40. Firm's ability to satisfy short term debt






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






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






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






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






45. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement






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






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






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






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






50. Records transactions when cash is recieved or paid