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






2. Extra value that is recorded when buying another company






3. Firm's ability to satisfy short term debt






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






5. A legal value assigned to each share of stock






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






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






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






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






10. Defines ethical behavior code of professional conduct






11. Licensed by the state/conduct audits






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






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






14. Entity loaning the money records a bond recievable






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

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






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






18. Due after 12 months






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






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






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






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






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






24. Revenues-Expenses






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






26. Records transactions when cash is recieved or paid






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






28. Cash - Accounts Recievable - Inventory






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






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






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






32. Firm's ability to satisfy long term debt






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






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






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






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






37. Cost allocated to each year of the assets life






38. Cost of bringing in revenues






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






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






41. Assets=

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






43. Borrowing corporation records bonds payable






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






45. Merchandise held for sale to customers






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






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






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






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






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