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Test your basic knowledge |
DSST Principles Of Finance
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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. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Owner - Capital
SEC (Securites and Exchange Commision)
International Accounting Standards Board
Portfolio Income
2. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Long Term Investments
Straight-line Depreciation Method
Owner - Capital
Shares
3. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Sarbanes-Oxley Act (SOX)
Net Income
Intangible assets
Current Ratio
4. 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).
Prepaid Expenses
Income Summary
Revenue Recognition Principle
T Account
5. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Current Ratio
Time Period Assumptions
Partnership
Long Term Liabilities
6. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Journal
Current Ratio
Sole Propietorship
Working Papers
7. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Corporations
Operating Cycle
Straight-line Depreciation Method
Net Income
8. List of accounts used by a company' includes and identification number for each account.
Cost Principle
Chart of Accounts
Journalizing
Adjusted Trial Balance
9. Excess of expenses over revenues for a period.
Shares
Operating Cycle
Stockholders
Net Loss
10. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Going-concern Assumptions
Classified Balance Sheet
Debt Ratio
Partnership
11. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Posting Reference Column
SMART Goal
Long Term Investments
Ethics
12. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Statement of Cash Flows
Accrued Revenues
Conceptual Framework
Shareholders
13. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Expense Recognition Principle
Money Market Account
Bailout
Operating Cycle
14. Income that is available after all of the essential financial commitments have been paid.
Adjusting Entry
Balance Sheet
Discretionary Income
Deficit
15. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Interim Financial Statements
International Accounting Standards Board
International Financial Reporting Standards
Bookkeeping
16. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Audit
Return on Assets
Debt Ratio
Bookkeeping
17. 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.
Unearned Revenues
Owner Withdrawals
Common Stock
Return on Assets
18. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Surplus
Net Income
Adjusted Trial Balance
Account Balance
19. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Internal transactions
Debit
Statement of Owner's Equity
Plant Assets
20. The principle prescribing that revenue is recognized when earned.
Liabilities
Conceptual Framework
Revenue Recognition Principle
Expenses
21. 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.
Accounting Period
Credit
Matching Principle
Shareholders
22. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Permanent Accounts
Revenue Recognition Principle
General Journal
Current Assets
23. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Annual Financial Statements
Intangible assets
Discretionary Income
Revenue Recognition Principle
24. The money left over when income exceeds expenditure.
Surplus
Expenses
Adjusted Trial Balance
Revenues
25. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Generally Accepted Accounting Principles
Money Market Account
Debt Ratio
Common Stock
26. Record containing all accounts (with amounts) for a business.
Contra Account
Working Papers
Operating Cycle
Ledger
27. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Shares
Time Period Assumptions
Straight-line Depreciation Method
Business Entity Assumption
28. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Book Value
T Account
Ponzi Scheme
Permanent Accounts
29. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Matching Principle (or Expense Recognition Principle)
Long Term Investments
Unclassified Balance Sheets
Time Period Assumptions
30. 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.
International Financial Reporting Standards
Accrual Basis Accounting
Posting
Shares
31. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Stock
Unclassified Balance Sheets
Accrued Expenses
Bookkeeping
32. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Balance Column Account
Posting
Recordkeeping
IRA (Individual Retirement Account)
33. Business owned by a single person.
Bookkeeping
Sole Propietorship
Preferred Stock
Cost-benefit Constraint
34. Independent group of full-time members responsible for setting accounting rules.
Shares
Plant Assets
Discretionary Income
Financial Accounting Standards Board
35. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Time Period Assumptions
Work Sheet
Book Value
Conceptual Framework
36. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Sole Proprietorship
Liabilities
Cost Principle
Securities
37. 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
Liabilities
Preferred Stock
Shares
Expanded Accounting Equation
38. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Working Papers
Journalizing
Long Term Liabilities
Creditors
39. Uncertainty about expected return.
Risk
Federal Reserve System
International Accounting Standards Board
Internal users
40. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Closing process
Income Summary
Net Loss
Shareholders
41. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Journalizing
Owner Investment
Accounting Period
Unearned Revenue
42. The first time a company sells shares of its stock to the public.
Common Stock
IPO
Balance Column Account
Accrual Basis Accounting
43. Expenses that remain the same regardless of the circumstances.
Internal users
Portfolio Income
Accounting
Fixed Expense
44. Report of changes in equity over a period; adjusted for increases and for decreases.
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45. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accounting
Partnership
Surplus
NYSE (New York Stock Exchange)
46. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Managerial Accounting
Classified Balance Sheet
Internal users
NYSE (New York Stock Exchange)
47. Outflows or using up of assets as part of operations of business to generate sales.
Partnership Agreement
Expenses
Working Papers
Events
48. 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.
Owner Withdrawals
Double Entry Accounting
Expense Recognition Principle
Shareholders
49. Items paid for in advance of receiving their benefits. Classified as assets.
Prepaid Expenses
Internal transactions
Owner Investment
Present Value
50. Individuals hired to review financial reports and information systems of organizations.
Auditors
Portfolio Income
Expanded Accounting Equation
Internal transactions