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DSST Principles Of Finance
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Subjects
:
dsst
,
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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. 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
Trial balance
Classified Balance Sheet
Deficit
2. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Classified Balance Sheet
Natural Business Years
Shares
Journalizing
3. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Pro Forma Financial Statement
NYSE (New York Stock Exchange)
Common Stock
Time Period Assumptions
4. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Journal
Permanent Accounts
SEC (Securites and Exchange Commision)
Closing Entries
5. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
NASDAQ
Cost Principle
Limited Liability Corporation
Current Assets
6. Area of accounting aimed mainly at serving external users.
Going-concern Assumptions
Secured Loan
Operating Cycle
Financial Accounting
7. Exchanges of economic value between one entity and another entity.
External Transactions
CD (Certificate of Deposit)
Revenues
Securities and Exchange Commission
8. Journal entries that affect at least three accounts.
Partnership
Compound Journal Entries
SEC (Securites and Exchange Commision)
Income Statement
9. Business owned by one person that is not organized as a corporation.
Operating Cycle
Secured Loan
Time Period Assumptions
Sole Proprietorship
10. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Internal transactions
Trial balance
Money Market Account
Risk Tolerance
11. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Fiscal Year
Closing Entries
Audit
Accounting Equation
12. Record containing all accounts (with amounts) for a business.
Time Period Assumptions
Ledger
Trial balance
Straight-line Depreciation Method
13. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Matching Principle (or Expense Recognition Principle)
Assets
Balance Column Account
Annual Financial Statements
14. Assets pulled out of the business by the owner.
Accrued Revenues
Owner Withdrawals
Expenses
Balance Sheet
15. 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
Accounting Period
NASDAQ
Partnership Agreement
Preferred Stock
16. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Source Documents
Measurement Principle
Debtors
Audit
17. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Work Sheet
Sarbanes-Oxley Act (SOX)
Unsecured Loan
Post Closing Trial Balance
18. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Materiality Constraint
Partnership Agreement
Plant Assets
Working Papers
19. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Sarbanes-Oxley Act (SOX)
Corporation
Stock
Contra Account
20. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Classified Balance Sheet
Accrued Expenses
Operating Cycle
Common Stock
21. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Unearned Revenue
Debtors
Partnership Agreement
Fixed Expense
22. Business owned by a single person.
Sole Propietorship
External Transactions
International Financial Reporting Standards
Plant Assets
23. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Owner - Capital
Balance Sheet
Current Assets
Balance Column Account
24. Creditors' claims on an organization's assets; involves a probable future payment of assets - products - or services that a company is obligated to make due to past transactions or events.
Creditors
Ethics
Liabilities
International Financial Reporting Standards
25. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Sole Propietorship
Pro Forma Financial Statement
Bookkeeping
Stock
26. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Risk Tolerance
Ethics
Full Disclosure Principle
Trial balance
27. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Operating Cycle
Account Balance
Posting
Corporation
28. A corporation's basic ownership share.
Account
Accounting Equation
Financial Accounting
Common Stock
29. Assets put into the business by the owner.
Bonds
SMART Goal
Owner Investment
Measurement Principle
30. Temporary account used only in the closing process to which the balances of revenue and expense accounts (including any gains or losses) are transferred. Its balance is transferred to the capital account (or retained earnings for a corporation).
Journal
Unadjusted Trial Balance
Common Stock
Income Summary
31. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Sole Propietorship
Debt Ratio
Annual Financial Statements
Money Market Account
32. Income that is available after all of the essential financial commitments have been paid.
Sole Propietorship
Partnership Agreement
Discretionary Income
Natural Business Years
33. Length of time covered by financial statements; also called reporting period.
Common Stock
Accounting Period
Owner Withdrawals
Deficit
34. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Federal Reserve System
Portfolio Income
Internal transactions
Source Documents
35. The value of a future cash steam discounted at the appropriate market interest rate.
Adjusting Entry
Partnership Agreement
Debtors
Present Value
36. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Fiscal Year
Net Income
Ethics
Equity
37. Happenings that both affect an organization's financial position and can be reliably measured.
Risk
Events
Matching Principle (or Expense Recognition Principle)
Classified Balance Sheet
38. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Money Market Account
Interim Financial Statements
Securities and Exchange Commission
External Transactions
39. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Mergers
Cash Basis Accounting
Risk Tolerance
Straight-line Depreciation Method
40. Persons using accounting information who are directly involved in managing the organization.
Chart of Accounts
Internal users
International Accounting Standards Board
Unearned Revenues
41. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Bailout
Mergers
Ethical Dilemma
Long Term Liabilities
42. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Owner Investment
Cash Basis Accounting
Mergers
Secured Loan
43. Excess of expenses over revenues for a period.
Debt Ratio
Net Loss
Acquisition
Partnership
44. Statements that show the effect of proposed transactions and events as if they had occurred.
Credit
Interim Financial Statements
Pro Forma Financial Statement
Securities
45. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Unadjusted Trial Balance
Full Disclosure Principle
Current Liabilities
Temporary Accounts
46. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
NYSE (New York Stock Exchange)
Statement of Owner's Equity
Accrued Revenues
Cost-benefit Constraint
47. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Income Summary
Work Sheet
Accounting Equation
Post Closing Trial Balance
48. Independent group of full-time members responsible for setting accounting rules.
Ledger
Book Value
Financial Accounting Standards Board
Annual Financial Statements
49. Gross increase in equity from a company's business activities that earn income.
Prepaid Expenses
Revenues
Current Liabilities
Risk Tolerance
50. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Pro Forma Financial Statement
Journalizing
Assets
Account
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