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. Borrowing corporation records bonds payable






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






3. Revenues-Expenses






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






5. Records transactions when cash is recieved or paid






6. Extra value that is recorded when buying another company






7. Monies to be recieved by the company from customers






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






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






10. Cost allocated to each year of the assets life






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






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






13. Are liabilities due within 12 months






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






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






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






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






18. Amounts to be recieved in the future from customers






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






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






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






22. Firm's ability to satisfy short term debt






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






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






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






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






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






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






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






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






31. 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






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






33. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money






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






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






37. Proportional increases in the number of shares outstanding






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






39. Cash - Accounts Recievable - Inventory






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






41. Refer to revenues from the sale of merchandise






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






43. Defines ethical behavior code of professional conduct






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






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






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


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






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






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






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