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






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






3. Proportional increases in the number of shares outstanding






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






5. Sales revenue/ total assets measures how efficiently the company uses assets to generate revenue






6. Refer to revenues from the sale of merchandise






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






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






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






10. Equals the difference between revenues and cost of sales






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


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






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






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






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






16. Costs incurred to produce revenues






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






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






19. 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






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






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






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






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






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






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






26. Firm's ability to satisfy long term debt






27. Due after 12 months






28. Entity loaning the money records a bond recievable






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






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






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






32. Monies to be recieved by the company from customers






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






34. 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






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






36. Borrowing corporation records bonds payable






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






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






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






40. A legal value assigned to each share of stock






41. Merchandise held for sale to customers






42. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue






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






44. Licensed by the state/conduct audits






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






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






47. Defines ethical behavior code of professional conduct






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






49. Extra value that is recorded when buying another company






50. Firm's ability to satisfy short term debt