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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. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Expanded Accounting Equation
Limited Liability Corporation
Full Disclosure Principle
Bookkeeping
2. Optional entries recorded at the beginning of a period that prepare the accounts for the usual journal entries as if adjusting entries had not occurred in the prior period.
Permanent Accounts
Reversing Entries
Bonds
Statement of Cash Flows
3. 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.
Unsecured Loan
Ponzi Scheme
Expense Recognition Principle
External Users
4. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Portfolio Income
Acquisition
Account
5. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Posting Reference Column
Reversing Entries
Unsecured Loan
Ethical Dilemma
6. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Owner - Capital
Pro Forma Financial Statement
Owner Investment
Materiality Constraint
7. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Materiality Constraint
Ledger
Book Value
Bonds
8. Excess of expenses over revenues for a period.
Managerial Accounting
Account Balance
Adjusting Entry
Net Loss
9. Business owned by two or more people.
Corporation
Partnership Agreement
Adjusting Entry
Partnership
10. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Posting
Debt Ratio
Internal users
Accounting Cycle
11. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Accounting
Operating Cycle
Bonds
Natural Business Years
12. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Debit
International Accounting Standards Board
Expanded Accounting Equation
Acquisition
13. Report of changes in equity over a period; adjusted for increases and for decreases.
14. Persons using accounting information who are directly involved in managing the organization.
Cost Principle
Internal users
Partnership
Stock
15. Individuals or organizations entitled to receive payments
Sole Proprietorship
Creditors
Partnership Agreement
Owner Investment
16. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenue
Current Assets
Risk Tolerance
Natural Business Years
17. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Secured Loan
Accounting
Going-concern Assumptions
Ethical Dilemma
18. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Surplus
Depreciation
Corporation
Ethics
19. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Risk Tolerance
Limited Liability Corporation
Recordkeeping
Securities
20. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Conceptual Framework
Financial Accounting
Events
Return on Assets
21. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Varaiable Expense
Full Disclosure Principle
Expanded Accounting Equation
Depreciation
22. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Current Assets
Common Stock
Partnership Agreement
Plant Assets
23. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Owner Investment
Cost-benefit Constraint
Time Period Assumptions
Income Summary
24. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Owner - Capital
Generally Accepted Accounting Principles
Accrual Basis Accounting
Credit
25. 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.
Unearned Revenues
Events
Liabilities
Chart of Accounts
26. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Revenues
Going-concern Assumptions
Secured Loan
Double Entry Accounting
27. Expenses that remain the same regardless of the circumstances.
Bailout
Natural Business Years
Fixed Expense
Internal transactions
28. A corporation's basic ownership share.
Common Stock
Fiscal Year
Account
Expenses
29. Length of time covered by financial statements; also called reporting period.
Source Documents
Accounting Period
Chart of Accounts
Audit
30. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Account
Double Entry Accounting
Adjusting Entry
Secured Loan
31. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Bailout
Long Term Investments
Posting
SEC (Securites and Exchange Commision)
32. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Shares
Statement of Owner's Equity
Expanded Accounting Equation
Audit
33. Journal entries that affect at least three accounts.
Recordkeeping
Accrued Revenues
SEC (Securites and Exchange Commision)
Compound Journal Entries
34. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
IRA (Individual Retirement Account)
Bonds
Profit Margin
Adjusted Trial Balance
35. The first time a company sells shares of its stock to the public.
Depreciation
IPO
Portfolio Income
Journalizing
36. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Liabilities
Stock
Account
Long Term Liabilities
37. Goals that are specific - measurable - attainable - realistic - and time bound.
Income Summary
Expense Recognition Principle
SMART Goal
Chart of Accounts
38. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Post Closing Trial Balance
Stockholders
Going-concern Assumptions
Bonds
39. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Business Entity Assumption
Expanded Accounting Equation
Balance Sheet
Unsecured Loan
40. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
IPO
External Users
Classified Balance Sheet
Portfolio Income
41. 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.
CD (Certificate of Deposit)
Ledger
SMART Goal
Matching Principle
42. Income from investments - including dividends - interest - or the sale of a property.
Portfolio Income
Account
Conceptual Framework
International Financial Reporting Standards
43. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Closing process
Balance Sheet
Closing Entries
Present Value
44. The value of a future cash steam discounted at the appropriate market interest rate.
External Transactions
Present Value
Events
NYSE (New York Stock Exchange)
45. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Owner Withdrawals
Accrued Expenses
Permanent Accounts
Present Value
46. 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.
Book Value
Accrual Basis Accounting
Credit
Income Statement
47. List of accounts used by a company' includes and identification number for each account.
Interim Financial Statements
Return
Chart of Accounts
Unadjusted Trial Balance
48. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Ledger
Temporary Accounts
Pro Forma Financial Statement
Unsecured Loan
49. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Long Term Liabilities
Intangible assets
Chart of Accounts
Account Balance
50. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Credit
Partnership
Ponzi Scheme
Interim Financial Statements