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






2. Firm's ability to satisfy long term debt






3. Due after 12 months






4. Refer to revenues from the sale of merchandise






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






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






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






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






9. Records transactions when cash is recieved or paid






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






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






12. Extra value that is recorded when buying another company






13. Amounts to be recieved in the future from customers






14. Monies to be recieved by the company from customers






15. Proportional increases in the number of shares outstanding






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






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






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






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






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






21. Cost of bringing in revenues






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






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






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






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






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






27. Firm's ability to satisfy short term debt






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






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






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






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






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






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






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






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






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






37. A legal value assigned to each share of stock






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






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

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






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






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






43. Merchandise held for sale to customers






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






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






46. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares






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






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






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






50. All assets not listed as current