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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. 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






2. 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






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






4. Records transactions when cash is recieved or paid






5. Due after 12 months






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






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






8. Cost allocated to each year of the assets life






9. Assets=


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






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






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






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






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






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






16. Monies to be recieved by the company from customers






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






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






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






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






21. Cash - Accounts Recievable - Inventory






22. Cost of bringing in revenues






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






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






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






26. Revenues-Expenses






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






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






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






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






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






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






33. Firm's ability to satisfy long term debt






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






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






36. Defines ethical behavior code of professional conduct






37. Are liabilities due within 12 months






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






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






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






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


42. Borrowing corporation records bonds payable






43. Retained earnings + Net Income - (Dividends)






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






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






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






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






48. Extra value that is recorded when buying another company






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






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