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Test your basic knowledge |
DSST Principles Of Finance
Start Test
Study First
Subjects
:
dsst
,
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. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Account
Ethical Dilemma
Revenues
Net Income
2. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Statement of Cash Flows
Adjusting Entry
Time Period Assumptions
Straight-line Depreciation Method
3. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Fixed Expense
Time Period Assumptions
Shareholders
Accounting
4. A security representing a share of ownership in a company - providing voting rights - and entitling the holer to a share of the company's success through dividends and/or capital appreciation.
Common Stock
Prepaid Expenses
Secured Loan
Balance Sheet
5. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Current Ratio
Account Balance
Matching Principle (or Expense Recognition Principle)
Post Closing Trial Balance
6. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
NASDAQ
Partnership Agreement
Securities
Unearned Revenue
7. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Unearned Revenues
Secured Loan
Statement of Cash Flows
Current Ratio
8. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Varaiable Expense
Permanent Accounts
Time Period Assumptions
Fixed Expense
9. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Work Sheet
Temporary Accounts
Corporations
Annual Financial Statements
10. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern Assumptions
Recordkeeping
Account
Events
11. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
Interim Financial Statements
Stockholders
Net Loss
12. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Working Papers
Annual Financial Statements
Cash Basis Accounting
Accounting
13. The value of a future cash steam discounted at the appropriate market interest rate.
Preferred Stock
Debit
Fixed Expense
Present Value
14. Owners of a corporation who usually receive dividends. Also called shareholders.
Stockholders
Bailout
Permanent Accounts
Expenses
15. Assets put into the business by the owner.
Shareholders
Owner Withdrawals
Cost-benefit Constraint
Owner Investment
16. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Current Liabilities
IRA (Individual Retirement Account)
Time Period Assumptions
Trial balance
17. Assets = Liabilities + Equity; Equity equals [Owner capital - owner withdrawal + revenue - expenses] for a non-corporation; Equity equals [Contributed capital - retained earnings + revenue - expenses] for a corporation where dividends are subtracted
Expanded Accounting Equation
Work Sheet
Net Loss
Financial Accounting
18. A security representing partial ownership of the company. It gives the holer priority to dividends over common stock investors. Capital stock that provides a specific dividend - which is paid before any dividends are pai to common stock holders - an
Preferred Stock
Annual Financial Statements
Sarbanes-Oxley Act (SOX)
Natural Business Years
19. Activities within an organization that can affect the accounting equation.
Financial Accounting Standards Board
Internal transactions
Compound Journal Entries
IRA (Individual Retirement Account)
20. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
IPO
Partnership
Assets
Surplus
21. Business owned by two or more people.
Creditors
Unsecured Loan
Partnership
Bailout
22. Prescribes expenses to be reported in the same period as the revenues that were eared as a result of the expenses. Also called the Expense Recognition Principle.
Stockholders
Risk
Matching Principle
Expanded Accounting Equation
23. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Matching Principle
Partnership
Accrued Expenses
Fiscal Year
24. Length of time covered by financial statements; also called reporting period.
Ethics
Working Papers
Posting Reference Column
Accounting Period
25. Business owned by a single person.
Internal transactions
Federal Reserve System
Adjusting Entry
Sole Propietorship
26. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Passive Income
General Journal
SEC (Securites and Exchange Commision)
Prepaid Expenses
27. Independent group of full-time members responsible for setting accounting rules.
Financial Accounting Standards Board
Time Period Assumptions
Revenues
Expense Recognition Principle
28. Create the Public Company Accounting Oversight Board - regulates analyst conflicts - imposes corporate governance requirements - enhances accounting and control disclosures - impacts insider transactions and executive loans - establishes new types of
Expense Recognition Principle
Unclassified Balance Sheets
Sarbanes-Oxley Act (SOX)
Federal Reserve System
29. Items paid for in advance of receiving their benefits. Classified as assets.
External Users
Debit
Prepaid Expenses
Ethics
30. Income that is available after all of the essential financial commitments have been paid.
Cost-benefit Constraint
External Transactions
Discretionary Income
Assets
31. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Straight-line Depreciation Method
External Users
Balance Column Account
32. Accounting standards set by the IASB which aim to develop a single set of global standards - to promote those standards - and converge national and international standards globally.
Journalizing
Corporations
IRA (Individual Retirement Account)
International Financial Reporting Standards
33. A tax deferred account that allows individuals to plan for their retirement.
Time Period Assumptions
Recordkeeping
Present Value
IRA (Individual Retirement Account)
34. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Unearned Revenues
Post Closing Trial Balance
Statement of Cash Flows
Balance Sheet
35. Financial statement that subtracts expenses from revenues to yield a net income or loss over a specified period of time; also includes any gains or losses.
Income Statement
IPO
Managerial Accounting
International Accounting Standards Board
36. List of accounts used by a company' includes and identification number for each account.
Prepaid Expenses
Adjusted Trial Balance
Money Market Account
Chart of Accounts
37. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Sarbanes-Oxley Act (SOX)
Acquisition
Return
Balance Column Account
38. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Full Disclosure Principle
Fixed Expense
International Financial Reporting Standards
Classified Balance Sheet
39. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Secured Loan
Ledger
Unearned Revenues
Adjusted Trial Balance
40. Happenings that both affect an organization's financial position and can be reliably measured.
Varaiable Expense
Events
Debit
Business Entity Assumption
41. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Closing Entries
Depreciation
Current Assets
CD (Certificate of Deposit)
42. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Adjusted Trial Balance
Events
Revenues
Cost Principle
43. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Net Income
Sole Propietorship
Mergers
Partnership
44. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
CD (Certificate of Deposit)
Intangible assets
Natural Business Years
Partnership
45. The central bank of the United States - with 12 Federal Reserve branch banks located in major cities throughout the nation. It helps to regulate the US monetary and banking system.
Sole Proprietorship
Federal Reserve System
Ledger
Expense Recognition Principle
46. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Plant Assets
SEC (Securites and Exchange Commision)
Financial Accounting Standards Board
Limited Liability Corporation
47. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Interim Financial Statements
Cash Basis Accounting
SEC (Securites and Exchange Commision)
Unearned Revenue
48. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Trial balance
Time Period Assumptions
Mergers
Unadjusted Trial Balance
49. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Sole Propietorship
Time Period Assumptions
Present Value
Risk
50. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Surplus
SMART Goal
Matching Principle (or Expense Recognition Principle)
Creditors