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






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

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3. Refer to revenues from the sale of merchandise






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






5. Merchandise held for sale to customers






6. Cash - Accounts Recievable - Inventory






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






8. Amounts that the corporation must pay to suppliers in the future






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






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






11. Due after 12 months






12. Relate to how a company finances its assets with debt or stockholders' equity






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






14. A legal value assigned to each share of stock






15. Licensed by the state/conduct audits






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






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






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






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






20. Cost allocated to each year of the assets life






21. Monies to be recieved by the company from customers






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






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






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






25. Retained earnings + Net Income - (Dividends)






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






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






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






29. 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






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






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. Cost of bringing in revenues






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






34. Records transactions when cash is recieved or paid






35. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors






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






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






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






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






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






41. Smaller proportional increases in the number of shares outstanding






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






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






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






45. Costs incurred to produce revenues






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






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






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






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






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