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






2. Monies to be recieved by the company from customers






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






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






5. Refer to revenues from the sale of merchandise






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






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






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






9. 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






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






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






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






13. Firm's ability to satisfy long term debt






14. Are liabilities due within 12 months






15. Due after 12 months






16. Records transactions when cash is recieved or paid






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






18. Amounts to be recieved in the future from customers






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






20. 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






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






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






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






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






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






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






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






28. Defines ethical behavior code of professional conduct






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






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






31. Cost of bringing in revenues






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






33. Proportional increases in the number of shares outstanding






34. Merchandise held for sale to customers






35. Retained earnings + Net Income - (Dividends)






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






37. Patents - trademarks - and copyrights that have value but not any physical presence






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






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






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






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






42. Firm's ability to satisfy short term debt






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


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






45. Entity loaning the money records a bond recievable






46. Assets=


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






48. Cost allocated to each year of the assets life






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






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