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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. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement
Initial Public Offering (IPO)
Nonrecurring items
Goodwill
Sales
2. Extra value that is recorded when buying another company
Solvency ratios
Goodwill
Horizontal common size statement
Common size income statement
3. Monies to be recieved by the company from customers
Debtor
Investing activities
Current ratio
Recievables
4. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard
Current ratio
Investing activities
Revenue Recognition Principle
Horizontal common size statement
5. Operating Income/Interest Expense - compares the amount of income available to make interest payments to interest payment requirements
Financing activities
Times Interest Earned Ration
AICPAs
Revenue Recognition Principle
6. Cost of television programs that will be aired during the next year
Balance Sheet
Television costs
Depreciation Expense
Net Income
7. Amounts that the corporation must pay to suppliers in the future
Current liabilites
Accumulated other comprehensive income
Basic earnings per share
Accounts Payable
8. Attest to whether a company's financial statements comply with the GAAP rules
Shares Outstanding
Dividend rate
Audits
Stock options
9. Cost of bringing in revenues
Expenses
Stockholders' Equity
Initial Public Offering (IPO)
Operating Expenses
10. Largest expense item which reports the wholesale costs of inventory sold during the accounting period
Accounts Payable
Cost of Goods Sold
Accumulated Depreciation
Preferred stock
11. Proportional increases in the number of shares outstanding
Statement of cash flows
Shares Outstanding
Trend index
Stock splits
12. Reports the company's profitability during an accounting period
Creditor
Income Statement
Noncurrent assets
Operating activities
13. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income
Noncurrent liabilities
Financial Leverage
Return on Equity
Accrual Accounting
14. Net Income/ total assets reveals how efficiently assets are used to generate profit
Stock splits
Nonrecurring items
Net Sales
Return on Asset
15. The total number of shares actually held by investors at a given time - =Shares issued-treasury shares
Shares Outstanding
Contributed Capital
Financing activities
Revenues
16. Subtracting operating expenses from gross profit (Income from Operations)
Accumulated Depreciation
Solvency ratios
Income Statement
Operating Income
17. Reports cash inflows + cash outflows during an accounting period
Stockholders
Statement of cash flows
Stock dividends
Common-size balance sheet
18. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself
Horizontal common size statement
Inventories
Treasury stock
Common-size balance sheet
19. Expected to be converted into cash - sold - or consumed within the next 12 months
Cost of Goods Sold
Current assets
Accumulated Depreciation
Liquidity ratios
20. Companies divide net income by the actual average number of common shares outstanding
Basic earnings per share
Revenue Recognition Principle
Television costs
Accumulated other comprehensive income
21. Firm's ability to satisfy long term debt
GAAP
Solvency ratios
Financial Leverage
CPAS
22. A legal value assigned to each share of stock
Statement of Stockholders equity
Historical cost principle
Discontinued Operations
Par value
23. When a company sells stock to the public for the first time as a publicly traded corporation
Initial Public Offering (IPO)
Asset Turnover
Stockholders
SEC
24. Costs incurred to produce revenues
Expenses
Trend index
Return on Sales
Extraordinary items
25. Firm's ability to satisfy short term debt
Audits
Common size income statement
Operating Income
Liquidity ratios
26. Contracts that give their holders the right to buy or sell shares of stock at a certain market price
Cash and Cash equivalents
Stock options
Current assets
Vertical common size balance sheet
27. States that companies should record assets and services at their acquisition cost - the amount paid for them - because this is the most reliable information
Stock options
Historical cost principle
Accounting Equation
Retained Earnings
28. Recorded when a company closes down or sells part of its business
Discontinued Operations
Retained Earnings
Treasury stock
Return on Common Equity
29. All assets not listed as current
Return on Sales
Cost of Goods Sold
Noncurrent assets
GAAP
30. Amounts to be recieved in the future from customers
Accounts recievable
Initial Public Offering (IPO)
liabilities + stockholders' equity
Debt Ratio
31. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members
FASB
Retained Earnings
Retained earnings(ending)
Cash and Cash equivalents
32. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Retained earnings(ending)
Asset
Revenue Recognition Principle
Contributed capital (ending)
33. Equals the difference between revenues and cost of sales
Gross Profit
Creditor
Example of Current Asset
Productivity
34. Net Income/Sales Revenue measures the profitability of each dollar of revenue
Dividend rate
Operating Expenses
Financing activities
Return on Sales
35. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Accrual Accounting
Revenue Recognition Principle
Vertical common size balance sheet
Common size income statement
36. Portion of assets the owners are free and clear of any liabilities
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37. Market price per share/EPS - to measure how expensive a company's stock is compared to EPS
Gains and Losses
Price earnings ratio
liabilities + stockholders' equity
Liquidity
38. Relate to a company's main business: selling products or services to earn net income
Operating activities
Return on Equity
Vertical common size balance sheet
Dividend rate
39. Licensed by the state/conduct audits
Operating Income
Expenses
Liquidity ratios
CPAS
40. This is what it costs to produce a product or provide a service
CPAS
Cost of Goods Sold(COGS)
Financial Leverage
Current liabilites
41. Refer to revenues from the sale of merchandise
Return on Equity
Return on Sales
Sales
Example of Current Asset
42. Entities owning shares of stock are the owners of the corporation
Stock dividends
Price earnings ratio
Stockholders
Return on Sales
43. Total liabilities/ Total assets reveals the proportion of assets financed with debt and solvency
AICPAs
Debt Ratio
Debtor
Return on Equity
44. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Solvency
Expenses
Retained earnings(ending)
Extraordinary items
45. Revenues-Expenses
Net Income
Television costs
AICPAs
Accrual Accounting
46. Indicate that returns or discounts were subtracted from total sales
Market value per share
Stockholders' Equity
Initial Public Offering (IPO)
Net Sales
47. Compares all amounts within one year to revenue of that same year
Retained Earnings
Cost of Goods Sold
Income Statement
Common size income statement
48. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors
Initial Public Offering (IPO)
Accounts recievable
Earnings per share
Nonrecurring items
49. A company's ability to pay liabilities for many years into the future
Solvency
Television costs
Accounts Payable
Basic earnings per share
50. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Retained Earnings
Stock options
Liquidity
Current ratio