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. Reports the company's profitability during an accounting period






2. Merchandise held for sale to customers






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






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






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






6. Assets=

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7. Carries a dividend rate which must be paid to preferred stockholders before any dividends can be paid to common stockholders






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






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






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






11. Items of value such as inventory and equipment are financed with liabilities(debt) or stockholders' equity(owners' shares






12. A legal value assigned to each share of stock






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






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






15. Cost of bringing in revenues






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






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






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






19. This is what it costs to produce a product or provide a service






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

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






22. Defines ethical behavior code of professional conduct






23. Extra value that is recorded when buying another company






24. Cash - Accounts Recievable - Inventory






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






26. Refer to revenues from the sale of merchandise






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






28. Are liabilities due within 12 months






29. Compares all amounts within on year to total assets of that same year






30. 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






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






32. 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






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






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






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






36. Records transactions when cash is recieved or paid






37. Amounts to be recieved in the future from customers






38. Annual common stock dividends paid/average number of common shares outstanding - amount of dividends paid annually for each share of stock held by investors






39. Companies divide net income by the actual average number of common shares outstanding






40. Net Income/ total assets reveals how efficiently assets are used to generate profit






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






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






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






44. Firm's ability to satisfy short term debt






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






46. Smaller proportional increases in the number of shares outstanding






47. A company's ability to pay liabilities for many years into the future






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






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






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