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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. Amounts that the corporation must pay to suppliers in the future
Accounts Payable
Investing activities
Asset Turnover
Net Income
2. Gross profit/Sales revenue - compares gross profit to revenue expressing gross profit as a percentage of net revenue
AICPAs
Gross Profit Margin
Net Sales
Par value
3. A company's ability to pay liabilities as they come due in the next year
Cost of Goods Sold(COGS)
SEC
Liquidity
Accounting Equation
4. Cost of television programs that will be aired during the next year
Recievables
Stock dividends
Goodwill
Television costs
5. Current assets/current liabilites - measure short term liquidity and the ability to pay current liabilities as they come due
Accounts recievable
FASB
Historical cost principle
Current ratio
6. Operating Income/Interest Expense - compares the amount of income available to make interest payments to interest payment requirements
Investing activities
Times Interest Earned Ration
Example of Current Asset
Audits
7. Recorded in stockholders equity 1. unrealized gains/losses on certain securities 2. Foreign currency translation adjustments 3. Certain gains/losses on pension plans
PCAOB
Accumulated other comprehensive income
Operating Expenses
Contributed Capital
8. Retained earnings + Net Income - (Dividends)
Accumulated other comprehensive income
Cash and Cash equivalents
Discontinued Operations
Retained earnings(ending)
9. Standardizes each item as based on a base year and reports data for subsequent years as a multiple of the standard
Accounting Equation
FASB
Inventories
Horizontal common size statement
10. Net Income/Sales Revenue measures the profitability of each dollar of revenue
Nonrecurring items
Expenses
Debt Ratio
Return on Sales
11. Measures how efficiently you can generate desired outputs from given inputs
Productivity
Price earnings ratio
Depreciation Expense
Sales
12. Indicate that returns or discounts were subtracted from total sales
Retained earnings(ending)
Net Sales
Liquidity
Television costs
13. Recorded when a company closes down or sells part of its business
Extraordinary items
Discontinued Operations
Noncurrent liabilities
Financing activities
14. Revenues are recorded in the period earned - not necessarily in the period that the company collects the money
Accumulated Depreciation
Revenue Recognition Principle
Television costs
Depreciation Expense
15. Equals the difference between revenues and cost of sales
Gross Profit
Initial Public Offering (IPO)
Operating activities
liabilities + stockholders' equity
16. Net Income-Preferred dividends/Average number of common shares outstanding - Amount of net income earned by each individual share of stock held by investors
Earnings per share
Intangible assets
Cost of Goods Sold
Debt Ratio
17. Records transactions when cash is recieved or paid
Television costs
Common-size balance sheet
Return on Equity
Cash- Basis Accounting
18. Cash - Accounts Recievable - Inventory
Example of Current Asset
Publicly traded
Contributed capital (ending)
Statement of Stockholders equity
19. legislative authority to set the reporting rules for accounting info of publicly held corporations
Common size income statement
Retained Earnings
Inventories
SEC
20. Net Income/ total assets reveals how efficiently assets are used to generate profit
Asset
Horizontal common size statement
Return on Asset
Income Statement
21. Carries a dividend rate which must be paid to preferred stockholders before any dividends can be paid to common stockholders
Publicly traded
Accounts recievable
Preferred stock
Stock splits
22. Expected to be converted into cash - sold - or consumed within the next 12 months
Cost of Goods Sold
Cost of Goods Sold(COGS)
Statement of cash flows
Current assets
23. Idea that accountants usually record transactions when they occur - not necessarily when cash is recieved or paid
Example of Current Asset
Gross Profit Margin
Accrual Accounting
Cost of Goods Sold
24. Includes all costs of generating sales besides cost of sales
Cost of Goods Sold
PCAOB
Current ratio
Operating Expenses
25. Expresses each balance sheet item as a percentage of total assets
Television costs
Liquidity ratios
Current assets
Vertical common size balance sheet
26. A company's ability to pay liabilities for many years into the future
Creditor
Accounts Payable
Solvency
Earnings per share
27. Due after 12 months
Noncurrent assets
CPAS
Example of Current Asset
Noncurrent liabilities
28. Amounts recieved from customers for products sold or services provided
Historical cost principle
GAAP
Income Statement
Revenues
29. All assets not listed as current
Price earnings ratio
Noncurrent assets
Operating Expenses
Accumulated Depreciation
30. Relate to how a company finances its assets with debt or stockholders' equity
Current liabilites
Debtor
liabilities + stockholders' equity
Financing activities
31. This is what it costs to produce a product or provide a service
Treasury stock
Cost of Goods Sold(COGS)
Statement of cash flows
Expenses
32. Costs incurred to produce revenues
Market value per share
Expenses
Asset
Accrual Accounting
33. Companies divide net income by the actual average number of common shares outstanding
Cost of Goods Sold
Basic earnings per share
Liquidity ratios
Stockholders' Equity
34. Cost of bringing in revenues
SEC
Revenue Recognition Principle
Expenses
Nonrecurring items
35. Total liabilities/ Total assets reveals the proportion of assets financed with debt and solvency
Noncurrent liabilities
Productivity
Debt Ratio
liabilities + stockholders' equity
36. Firm's ability to satisfy short term debt
Goodwill
Inventories
Liquidity ratios
Stockholders' Equity
37. Amounts to be recieved in the future from customers
Accounts recievable
Creditor
Noncurrent liabilities
CPAS
38. Expresses each income statement item as a percentage of sales
Cost of Goods Sold
Solvency
Vertical common size income statement
Vertical common size balance sheet
39. Accountants deem unusual and infrequent - may appear in the bottom section of the income statement
Nonrecurring items
Accounts Payable
FASB
Contributed capital (ending)
40. Establish auditing standards and conduct inspections of the public accounting firm that perform audits
Current ratio
Vertical common size balance sheet
Stock options
PCAOB
41. Cost allocated to each year of the assets life
Retained Earnings
Depreciation Expense
Debt Ratio
Current ratio
42. 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
Basic earnings per share
Cost of Goods Sold
Sales
Financial Leverage
43. Assets=
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44. Contributed capital - beginning + issuance of shares - (Repurchase to retire shares)
Contributed capital (ending)
Noncurrent liabilities
Stockholders' Equity
Operating Income
45. Sales revenue/ total assets measures how efficiently the company uses assets to generate revenue
Stock splits
Investing activities
Asset Turnover
Shares Outstanding
46. Stock bought back from investors not recorded as an asset because it is impossible for a company to own itself
Recievables
Asset
Treasury stock
GAAP
47. Market price per share/EPS - to measure how expensive a company's stock is compared to EPS
Accumulated Depreciation
Asset
Noncurrent assets
Price earnings ratio
48. Refer to revenues from the sale of merchandise
Sales
Return on Asset
Shares Outstanding
Stock dividends
49. Provides a snapshot of a company's financial position as of a certain date
Accrual Accounting
Preferred stock
Current ratio
Balance Sheet
50. Highly unusual transactions that are considered unusual in nature and infrequent in occurence
Asset Turnover
liabilities + stockholders' equity
Extraordinary items
Noncurrent liabilities