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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. 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.
Money Market Account
Federal Reserve System
Limited Liability Corporation
Fixed Expense
2. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Return on Assets
Accrual Basis Accounting
Money Market Account
Shareholders
3. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Work Sheet
Cost Principle
Securities
Journal
4. Activities within an organization that can affect the accounting equation.
Annual Financial Statements
Internal transactions
Account
Return on Assets
5. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Prepaid Expenses
Matching Principle (or Expense Recognition Principle)
Expanded Accounting Equation
Cost Principle
6. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Partnership Agreement
Adjusted Trial Balance
Matching Principle (or Expense Recognition Principle)
Unearned Revenues
7. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Unclassified Balance Sheets
Owner - Capital
Generally Accepted Accounting Principles
Long Term Investments
8. Process of recording transactions in a journal.
Journalizing
Events
SMART Goal
Unearned Revenues
9. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Ethics
Temporary Accounts
Journal
Operating Cycle
10. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Temporary Accounts
Accrued Expenses
Cost Principle
Balance Column Account
11. A tax deferred account that allows individuals to plan for their retirement.
Accrued Expenses
IRA (Individual Retirement Account)
Going-concern Assumptions
Reversing Entries
12. Principle that assumes transactions and events can be expressed in money units.
Secured Loan
Federal Reserve System
Working Papers
Monetary Unit Assumption
13. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Shares
Risk Tolerance
Credit
Long Term Liabilities
14. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Source Documents
Revenue Recognition Principle
Double Entry Accounting
CD (Certificate of Deposit)
15. Entries recorded at the end of each accounting period to transfer end of period balances in revenue - gain - expense - loss - and withdrawal (dividend for a corporation) accounts to the capital account (to retain earnings for a corporation).
Closing Entries
Risk Tolerance
Unclassified Balance Sheets
Varaiable Expense
16. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Corporations
Full Disclosure Principle
Ethical Dilemma
Prepaid Expenses
17. Owners of a corporation who usually receive dividends. Also called stockholders.
CD (Certificate of Deposit)
Present Value
Shareholders
Shares
18. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Ethical Dilemma
International Financial Reporting Standards
Accounting Cycle
Work Sheet
19. An expense that changes from period to perio - such as food or gasoline costs.
Classified Balance Sheet
Income Statement
Unclassified Balance Sheets
Varaiable Expense
20. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Straight-line Depreciation Method
Assets
Intangible assets
Book Value
21. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Assets
Current Ratio
Unadjusted Trial Balance
Deficit
22. Record containing all accounts (with amounts) for a business.
Permanent Accounts
Managerial Accounting
Recordkeeping
Ledger
23. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Trial balance
IRA (Individual Retirement Account)
Auditors
Generally Accepted Accounting Principles
24. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Conceptual Framework
IRA (Individual Retirement Account)
Present Value
Common Stock
25. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Auditors
Deficit
Book Value
Going-concern Assumptions
26. 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).
International Financial Reporting Standards
Financial Accounting Standards Board
Income Summary
Operating Cycle
27. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Owner Withdrawals
Return on Assets
Expanded Accounting Equation
Debt Ratio
28. The principle prescribing that revenue is recognized when earned.
Journal
Owner - Capital
Money Market Account
Revenue Recognition Principle
29. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Securities
Matching Principle (or Expense Recognition Principle)
Mergers
Auditors
30. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
CD (Certificate of Deposit)
Matching Principle
Net Income
Liabilities
31. The value of a future cash steam discounted at the appropriate market interest rate.
Mergers
Depreciation
Present Value
Financial Accounting Standards Board
32. 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.
SMART Goal
Ethical Dilemma
Common Stock
Current Ratio
33. Independent group of full-time members responsible for setting accounting rules.
Balance Sheet
Audit
Financial Accounting Standards Board
External Transactions
34. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Long Term Investments
Going-concern Assumptions
Full Disclosure Principle
General Journal
35. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Account Balance
Present Value
Conceptual Framework
Adjusted Trial Balance
36. List of accounts used by a company' includes and identification number for each account.
Double Entry Accounting
Chart of Accounts
Partnership Agreement
Permanent Accounts
37. An acronym for the National Association of Securities Dealers Automated Quotations. NASDAQ was founded in 1970 and is the largest electronic stock exchange in the United States. Unlike the NYSE - it has no physical location - existing entirely on cyb
NASDAQ
Journal
Operating Cycle
Ethical Dilemma
38. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Working Papers
Business Entity Assumption
Debit
Net Loss
39. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Income Summary
Unclassified Balance Sheets
Financial Accounting Standards Board
Classified Balance Sheet
40. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Journal
Operating Cycle
Common Stock
Current Ratio
41. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Passive Income
Unearned Revenues
Accounting
Book Value
42. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Materiality Constraint
Post Closing Trial Balance
CD (Certificate of Deposit)
Sarbanes-Oxley Act (SOX)
43. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Matching Principle (or Expense Recognition Principle)
Interim Financial Statements
Adjusted Trial Balance
Profit Margin
44. 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.
Temporary Accounts
International Financial Reporting Standards
Sarbanes-Oxley Act (SOX)
Shares
45. The first time a company sells shares of its stock to the public.
Statement of Cash Flows
Long Term Liabilities
Cost Principle
IPO
46. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Time Period Assumptions
Posting Reference Column
Deficit
Corporation
47. 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.
Matching Principle
Partnership Agreement
Fiscal Year
Limited Liability Corporation
48. The twelve month period that ends when a company's sales activities are at their lowest point.
Posting Reference Column
Permanent Accounts
Natural Business Years
Money Market Account
49. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Deficit
Money Market Account
Partnership
Stock
50. Happenings that both affect an organization's financial position and can be reliably measured.
Debt Ratio
Events
Unclassified Balance Sheets
Risk Tolerance