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Test your basic knowledge |
Financial Statements
Start Test
Study First
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. A legal value assigned to each share of stock
Publicly traded
CPAS
Investing activities
Par value
2. Net Income/ total assets reveals how efficiently assets are used to generate profit
Productivity
Return on Asset
Horizontal common size statement
Historical cost principle
3. Reports cash inflows + cash outflows during an accounting period
Basic earnings per share
Preferred stock
Recievables
Statement of cash flows
4. Extra value that is recorded when buying another company
Cash and Cash equivalents
Debt Ratio
Current assets
Goodwill
5. Operating Income/Interest Expense - compares the amount of income available to make interest payments to interest payment requirements
Times Interest Earned Ration
Basic earnings per share
Productivity
Statement of cash flows
6. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard
Net Income
Recievables
Operating Expenses
Horizontal common size statement
7. Firm's ability to satisfy short term debt
Liquidity ratios
Solvency ratios
Trend index
Accounting Equation
8. Relate to the need for investing in property - plant - and equipment or expanding by making investments in other companies
Investing activities
Net Sales
Nonrecurring items
Cash- Basis Accounting
9. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Balance Sheet
Market value per share
Extraordinary items
Solvency
10. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Stock options
Trend index
PCAOB
Debtor
11. Cost of bringing in revenues
Price earnings ratio
Retained earnings(ending)
Gross Profit
Expenses
12. Defines ethical behavior code of professional conduct
CPAS
Accounts Payable
AICPAs
Cost of Goods Sold
13. Firm's ability to satisfy long term debt
Initial Public Offering (IPO)
Return on Common Equity
Solvency ratios
Retained Earnings
14. Measures how efficiently you can generate desired outputs from given inputs
Solvency ratios
Productivity
Solvency
Extraordinary items
15. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Revenue Recognition Principle
Times Interest Earned Ration
Gross Profit
Productivity
16. Attest to whether a company's financial statements comply with the GAAP rules
Stockholders' Equity
Statement of Stockholders equity
Audits
Stock splits
17. Portion of assets the owners are free and clear of any liabilities
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18. Refer to revenues from the sale of merchandise
Return on Equity
Inventories
Sales
CPAS
19. Reports the company's profitability during an accounting period
Income Statement
Debt Ratio
FASB
Return on Equity
20. Equals the difference between revenues and cost of sales
Noncurrent assets
Net Sales
Income Statement
Gross Profit
21. Smaller proportional increases in the number of shares outstanding
Vertical common size income statement
Noncurrent assets
Stock dividends
Solvency ratios
22. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Return on Sales
Accrual Accounting
Financial Leverage
Par value
23. A company's ability to pay liabilities as they come due in the next year
Solvency ratios
Goodwill
Cost of Goods Sold(COGS)
Liquidity
24. Entities owning shares of stock are the owners of the corporation
Stockholders
Solvency ratios
Income Statement
Gross Profit Margin
25. legislative authority to set the reporting rules for accounting info of publicly held corporations
Operating activities
Stockholders' Equity
liabilities + stockholders' equity
SEC
26. Largest expense item which reports the wholesale costs of inventory sold during the accounting period
GAAP
Cost of Goods Sold
Debt Ratio
Vertical common size income statement
27. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income
Return on Equity
Noncurrent assets
Times Interest Earned Ration
Cash and Cash equivalents
28. Merchandise held for sale to customers
Inventories
Vertical common size balance sheet
Treasury stock
Net Income
29. Shares are bought and sold on stock exchanges such as the New york stock exchange
Common size income statement
Investing activities
Publicly traded
Contributed Capital
30. Rules that management must follow when preparing financial statements available to investors
Current ratio
GAAP
Debtor
Balance Sheet
31. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement
Nonrecurring items
Operating Income
Return on Sales
Net Sales
32. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares
Shares Outstanding
Cash and Cash equivalents
Asset
Gross Profit Margin
33. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue
Solvency
Initial Public Offering (IPO)
Gross Profit Margin
Cost of Goods Sold(COGS)
34. Actual currency - bank accounts - and investments that can be liquidated immediately
Discontinued Operations
Cash and Cash equivalents
Treasury stock
Sales
35. Assets=
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36. Due after 12 months
Noncurrent assets
Noncurrent liabilities
Accounting Equation
Vertical common size balance sheet
37. Expected to be converted into cash - sold - or consumed within the next 12 months
Current assets
Solvency ratios
Revenue Recognition Principle
Return on Common Equity
38. Cash - Accounts Recievable - Inventory
Example of Current Asset
Solvency ratios
Retained Earnings
Television costs
39. Patents - trademarks - and copyrights that have value but not any physical presence
Intangible assets
Net Income
Trend index
Operating activities
40. Expresses each income statement item as a percentage of sales
Vertical common size income statement
Television costs
Stock splits
Liquidity
41. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members
CPAS
FASB
Productivity
Noncurrent liabilities
42. A company's ability to pay liabilities for many years into the future
Solvency
Liquidity
Example of Current Asset
Dividend rate
43. Retained earnings + Net Income - (Dividends)
Current assets
Retained earnings(ending)
Gross Profit Margin
Common-size balance sheet
44. Amounts that the corporation must pay to suppliers in the future
Accounts Payable
Accumulated Depreciation
Contributed capital (ending)
Vertical common size balance sheet
45. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Television costs
Accounting Equation
Preferred stock
Contributed capital (ending)
46. Amounts paid by stockholders to purchase common stock and preferred stock
Television costs
Times Interest Earned Ration
Contributed Capital
Debt Ratio
47. Compares all amounts within one year to revenue of that same year
Market value per share
Recievables
Common size income statement
Expenses
48. When a company sells stock to the public for the first time as a publicly traded corporation
Common size income statement
Net Sales
Initial Public Offering (IPO)
Accumulated Depreciation
49. Current amount/base year amount x 100 measures the percentage of change from the base year and indicates growth trends for a company
Revenue Recognition Principle
AICPAs
Trend index
Intangible assets
50. Cost of television programs that will be aired during the next year
Statement of cash flows
Stockholders
Television costs
Historical cost principle