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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. Smaller proportional increases in the number of shares outstanding
Current liabilites
Stock dividends
Solvency ratios
GAAP
2. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Price earnings ratio
Extraordinary items
Return on Sales
Times Interest Earned Ration
3. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance
Current assets
Price earnings ratio
Financing activities
Return on Common Equity
4. 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
Financial Leverage
Sales
SEC
Debtor
5. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Current ratio
Discontinued Operations
Balance Sheet
Return on Sales
6. Market price per share/EPS - to measure how expensive a company's stock is compared to EPS
Price earnings ratio
Solvency
Investing activities
FASB
7. Total amount of depreciation expensed since the assets' date of purchase
Productivity
Accumulated Depreciation
Cash- Basis Accounting
Price earnings ratio
8. Sales revenue/ total assets measures how efficiently the company uses assets to generate revenue
Debt Ratio
Debtor
Asset Turnover
Times Interest Earned Ration
9. Recorded when a company closes down or sells part of its business
Discontinued Operations
Retained earnings(ending)
Vertical common size income statement
Treasury stock
10. Entity loaning the money records a bond recievable
Recievables
Financial Leverage
Creditor
Debt Ratio
11. Operating Income/Interest Expense - compares the amount of income available to make interest payments to interest payment requirements
Statement of Stockholders equity
Times Interest Earned Ration
Revenue Recognition Principle
Current assets
12. Firm's ability to satisfy long term debt
Solvency ratios
GAAP
Par value
Depreciation Expense
13. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Common-size balance sheet
Contributed capital (ending)
Accumulated Depreciation
Debt Ratio
14. Companies divide net income by the actual average number of common shares outstanding
Basic earnings per share
Stock splits
Stock options
GAAP
15. Proportional increases in the number of shares outstanding
Stock dividends
Stock splits
Dividend rate
Depreciation Expense
16. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Revenue Recognition Principle
SEC
Historical cost principle
Accounting Equation
17. 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
Statement of Stockholders equity
Contributed Capital
SEC
Price earnings ratio
18. Indicate that returns or discounts were subtracted from total sales
Dividend rate
GAAP
Depreciation Expense
Net Sales
19. Revenues-Expenses
Noncurrent assets
Vertical common size income statement
Dividend rate
Net Income
20. Records transactions when cash is recieved or paid
Cash- Basis Accounting
Times Interest Earned Ration
Publicly traded
Discontinued Operations
21. When a company sells stock to the public for the first time as a publicly traded corporation
Trend index
Television costs
Initial Public Offering (IPO)
Noncurrent assets
22. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Inventories
Initial Public Offering (IPO)
Accrual Accounting
Shares Outstanding
23. Expresses each income statement item as a percentage of sales
Return on Sales
Extraordinary items
Goodwill
Vertical common size income statement
24. Refer to revenues from the sale of merchandise
Vertical common size income statement
Return on Equity
Contributed Capital
Sales
25. Firm's ability to satisfy short term debt
Accumulated Depreciation
Liquidity ratios
Treasury stock
Initial Public Offering (IPO)
26. Amounts paid by stockholders to purchase common stock and preferred stock
Common size income statement
liabilities + stockholders' equity
Financing activities
Contributed Capital
27. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans
Return on Common Equity
Debtor
Trend index
Accumulated other comprehensive income
28. Expresses each balance sheet item as a percentage of total assets
Intangible assets
Treasury stock
Vertical common size balance sheet
Return on Asset
29. Borrowing corporation records bonds payable
Debtor
Goodwill
Return on Common Equity
Cost of Goods Sold
30. A company's ability to pay liabilities as they come due in the next year
Liquidity
Price earnings ratio
Debt Ratio
Vertical common size income statement
31. Compares all amounts within on year to total assets of that same year
PCAOB
Noncurrent liabilities
Current assets
Common-size balance sheet
32. Retained earnings + Net Income - (Dividends)
Productivity
Income Statement
FASB
Retained earnings(ending)
33. Amounts to be recieved in the future from customers
Accounts recievable
Goodwill
Gains and Losses
Contributed capital (ending)
34. Cost of bringing in revenues
Expenses
Gains and Losses
Accumulated other comprehensive income
Preferred stock
35. Stock market trading price of the company's common stock
Liquidity
Expenses
Preferred stock
Market value per share
36. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue
Income Statement
Gross Profit Margin
Creditor
Current assets
37. Attest to whether a company's financial statements comply with the GAAP rules
Audits
Treasury stock
Horizontal common size statement
Inventories
38. Assets=
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39. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income
Operating Expenses
Operating Income
Financial Leverage
Return on Equity
40. Relate to a company's main business: selling products or services to earn net income
Discontinued Operations
Depreciation Expense
Historical cost principle
Operating activities
41. Most accounting reporting standards that formulate GAAP are set by the 7 full time voting members
PCAOB
Income Statement
FASB
Gross Profit Margin
42. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard
Accounts recievable
PCAOB
Horizontal common size statement
Expenses
43. All assets not listed as current
Noncurrent assets
Extraordinary items
Discontinued Operations
Financial Leverage
44. Relate to how a company finances its assets with debt or stockholders' equity
Preferred stock
Financing activities
Accounts recievable
Retained earnings(ending)
45. Equals the difference between revenues and cost of sales
Audits
Gross Profit
Horizontal common size statement
Stockholders' Equity
46. Annual common stock dividends paid/average number of common shares outstanding - amount of dividends paid annually for each share of stock held by investors
Current liabilites
Stockholders
Return on Sales
Dividend rate
47. Merchandise held for sale to customers
SEC
Statement of Stockholders equity
Initial Public Offering (IPO)
Inventories
48. Arise from the sale of long-lived assets or investments
Current ratio
Return on Common Equity
Gains and Losses
Initial Public Offering (IPO)
49. Expected to be converted into cash - sold - or consumed within the next 12 months
Current assets
Inventories
Cost of Goods Sold
GAAP
50. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement
Return on Common Equity
Nonrecurring items
Shares Outstanding
Inventories