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






2. Expected to be converted into cash - sold - or consumed within the next 12 months






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






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






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






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






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






8. Firm's ability to satisfy short term debt






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






10. Reports cash inflows + cash outflows during an accounting period






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






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






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






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






15. 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






16. Cash - Accounts Recievable - Inventory






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






18. Refer to revenues from the sale of merchandise






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






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






21. Firm's ability to satisfy long term debt






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






23. Cost allocated to each year of the assets life






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






25. Patents - trademarks - and copyrights that have value but not any physical presence






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






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






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






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






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






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






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






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






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






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






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






37. Entity loaning the money records a bond recievable






38. A legal value assigned to each share of stock






39. Smaller proportional increases in the number of shares outstanding






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






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






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






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






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






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






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






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






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






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






50. Defines ethical behavior code of professional conduct