Test your basic knowledge |

DSST Principles Of Finance

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. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.






2. Record containing all accounts (with amounts) for a business.






3. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.






4. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.






5. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.






6. Normal time between paying cash for merchandise or employee services and receiving cash from customers.






7. Prescribes expenses to be reported in the same period as the revenues that were eared as a result of the expenses. Also called the Matching Principle.






8. Analysis and report of an organization's accounting system - its records - and its reports using various tests.






9. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.






10. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.






11. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.






12. 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.






13. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.






14. Owners of a corporation who usually receive dividends. Also called stockholders.






15. Debt securities that are issued by a borrower to raise capital . Bonds guarantee payments of the original amount borrowe plus interest and/or repayable on a fixed rate when the bond matures.






16. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.






17. Revenues earned in a period that both unrecorded and not yet received in cash (or other assets; adjusting entries for recording accrued revenues involve increasing assets and increasing revenues.






18. 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






19. Accounting information is based on cost with potential subsequent adjustments to fair value.






20. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)






21. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.






22. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.






23. Owner's claim on the assets of a business; equals the residual interest in an entity's assets after deducting liabilities. Also called net assets.






24. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.






25. Unincorporated association of two or more persons to pursue a business for profit as co-owners.






26. Difference between total debits and total credits (including the beginning balance) for an account.






27. Statements that show the effect of proposed transactions and events as if they had occurred.






28. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.






29. Individuals or organizations entitled to receive payments






30. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.






31. Area of accounting aimed mainly at serving external users.






32. Happenings that both affect an organization's financial position and can be reliably measured.






33. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.






34. Process of recording transactions in a journal.






35. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).






36. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.






37. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.






38. A written framework to guide the development - preparation - and interpretation of financial accounting information.






39. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.






40. All purpose journal for recording the debits and credits of transactions and events.






41. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.






42. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.






43. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.






44. Items paid for in advance of receiving their benefits. Classified as assets.






45. 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).






46. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.






47. A loan that is backed by collateral such as cars - houses - or other assets.






48. Expenses that remain the same regardless of the circumstances.






49. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.






50. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.