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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. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Extraordinary items
Debt Ratio
Contributed Capital
GAAP
2. Portion of assets the owners are free and clear of any liabilities
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3. Refer to revenues from the sale of merchandise
Stock splits
Sales
Preferred stock
Debtor
4. Total amount of depreciation expensed since the assets' date of purchase
Accumulated Depreciation
Trend index
Goodwill
Nonrecurring items
5. Merchandise held for sale to customers
Current liabilites
Common-size balance sheet
Inventories
Income Statement
6. Cash - Accounts Recievable - Inventory
Example of Current Asset
Recievables
Gross Profit
Solvency ratios
7. Assets- Liabilitie+ Equity OR Assets Liabilities- assets
Accounting Equation
Return on Common Equity
Accounts recievable
Liquidity ratios
8. Amounts that the corporation must pay to suppliers in the future
Common-size balance sheet
Gains and Losses
Asset Turnover
Accounts Payable
9. Shares are bought and sold on stock exchanges such as the New york stock exchange
Shares Outstanding
Stockholders' Equity
Gains and Losses
Publicly traded
10. Net Income/ Stockholders Equity - measures how effectively stockholders' equity is used to produce net income
Operating activities
Audits
Return on Equity
Cost of Goods Sold(COGS)
11. Due after 12 months
Noncurrent liabilities
Gains and Losses
Stock dividends
Current ratio
12. Relate to how a company finances its assets with debt or stockholders' equity
Cash and Cash equivalents
Return on Asset
Financing activities
Sales
13. Net Income-Preferred Dividends/Common Stockholders equity - To analyze stock performance
Return on Common Equity
Cash and Cash equivalents
Revenues
Horizontal common size statement
14. A legal value assigned to each share of stock
Contributed capital (ending)
Preferred stock
Par value
Cost of Goods Sold(COGS)
15. Licensed by the state/conduct audits
CPAS
Common-size balance sheet
Par value
Example of Current Asset
16. Sales revenue/ total assets measures how efficiently the company uses assets to generate revenue
Asset Turnover
Return on Common Equity
Times Interest Earned Ration
Discontinued Operations
17. Expresses each balance sheet item as a percentage of total assets
Sales
Vertical common size balance sheet
Cash and Cash equivalents
Return on Equity
18. Net income earned by the company since its incorporation and not yet distributed as dividends
Net Sales
Balance Sheet
Asset Turnover
Retained Earnings
19. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Accumulated Depreciation
Return on Asset
PCAOB
Historical cost principle
20. Cost allocated to each year of the assets life
Depreciation Expense
CPAS
Liquidity
Net Sales
21. Monies to be recieved by the company from customers
Nonrecurring items
Recievables
Revenues
AICPAs
22. Operating Income/Interest Expense - compares the amount of income available to make interest payments to interest payment requirements
Audits
Times Interest Earned Ration
Accrual Accounting
Discontinued Operations
23. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Accrual Accounting
Shares Outstanding
Accumulated Depreciation
Contributed capital (ending)
24. A company's ability to pay liabilities as they come due in the next year
Liquidity
Net Income
Revenues
Extraordinary items
25. Retained earnings + Net Income - (Dividends)
Par value
Accounts Payable
Retained earnings(ending)
Contributed capital (ending)
26. Net Income/Sales Revenue measures the profitability of each dollar of revenue
Intangible assets
Dividend rate
Return on Sales
Preferred stock
27. Entities owning shares of stock are the owners of the corporation
Stock dividends
Contributed Capital
Stockholders
Revenues
28. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue
Gross Profit Margin
Recievables
Productivity
Net Income
29. 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
Dividend rate
FASB
Gross Profit
Statement of Stockholders equity
30. Indicate that returns or discounts were subtracted from total sales
Current ratio
Accumulated other comprehensive income
Net Sales
Extraordinary items
31. 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
Debtor
Financing activities
Inventories
Financial Leverage
32. Cost of bringing in revenues
Contributed Capital
Expenses
Investing activities
Liquidity ratios
33. Relate to the need for investing in property - plant - and equipment or expanding by making investments in other companies
Investing activities
Historical cost principle
Vertical common size income statement
Initial Public Offering (IPO)
34. Records transactions when cash is recieved or paid
Cash- Basis Accounting
Return on Common Equity
Stock splits
Debtor
35. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors
Return on Sales
Earnings per share
Contributed Capital
Sales
36. Arise from the sale of long-lived assets or investments
Retained Earnings
Gains and Losses
Vertical common size balance sheet
liabilities + stockholders' equity
37. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans
Accumulated other comprehensive income
Nonrecurring items
SEC
Shares Outstanding
38. Attest to whether a company's financial statements comply with the GAAP rules
Contributed Capital
Audits
Recievables
Gross Profit
39. Reports the company's profitability during an accounting period
Accounts recievable
Debtor
Price earnings ratio
Income Statement
40. Largest expense item which reports the wholesale costs of inventory sold during the accounting period
Intangible assets
Cost of Goods Sold
Nonrecurring items
Contributed Capital
41. Smaller proportional increases in the number of shares outstanding
Accounting Equation
Stock dividends
Productivity
Balance Sheet
42. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Return on Asset
Revenue Recognition Principle
Trend index
Cash and Cash equivalents
43. Measures how efficiently you can generate desired outputs from given inputs
Initial Public Offering (IPO)
Stock dividends
Asset Turnover
Productivity
44. Subtracting operating expenses from gross profit (Income from Operations)
Operating Income
Gains and Losses
PCAOB
Treasury stock
45. Costs incurred to produce revenues
Goodwill
Expenses
Common size income statement
Par value
46. legislative authority to set the reporting rules for accounting info of publicly held corporations
Stock dividends
Debt Ratio
SEC
Revenue Recognition Principle
47. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Contributed capital (ending)
Vertical common size balance sheet
Basic earnings per share
Investing activities
48. Total liabilities/ Total assets reveals the proportion of assets financed with debt and solvency
Inventories
Investing activities
Accrual Accounting
Debt Ratio
49. Relate to a company's main business: selling products or services to earn net income
Shares Outstanding
Operating activities
Trend index
Times Interest Earned Ration
50. Recorded when a company closes down or sells part of its business
Stock dividends
Discontinued Operations
Sales
Nonrecurring items