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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. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Debit
Secured Loan
Risk
Discretionary Income
2. A loan that is backed by collateral such as cars - houses - or other assets.
Stock
Secured Loan
Compound Journal Entries
Ethical Dilemma
3. Loaning or giving money to a business in orer to save it from bankruptcy.
Stockholders
Events
Bailout
Mergers
4. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Closing process
Conceptual Framework
Expenses
Return
5. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Journal
Unearned Revenue
Balance Sheet
Unclassified Balance Sheets
6. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Debtors
Audit
Sole Proprietorship
Closing Entries
7. 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.
External Transactions
CD (Certificate of Deposit)
Plant Assets
Reversing Entries
8. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Source Documents
Credit
Book Value
Unearned Revenues
9. 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.
Sarbanes-Oxley Act (SOX)
Expense Recognition Principle
Current Liabilities
Net Income
10. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Contra Account
Accrued Revenues
Income Statement
Ledger
11. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Matching Principle
Internal transactions
Partnership
Permanent Accounts
12. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Trial balance
Account
Managerial Accounting
Straight-line Depreciation Method
13. The combining of two or more comapnies into one larger company.
Ponzi Scheme
Varaiable Expense
Double Entry Accounting
Mergers
14. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Temporary Accounts
Shareholders
Long Term Investments
Accrued Expenses
15. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Monetary Unit Assumption
Unearned Revenues
Partnership Agreement
Working Papers
16. Statements that show the effect of proposed transactions and events as if they had occurred.
Pro Forma Financial Statement
IRA (Individual Retirement Account)
Prepaid Expenses
External Users
17. List of accounts used by a company' includes and identification number for each account.
Chart of Accounts
IRA (Individual Retirement Account)
Cost Principle
Return
18. 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
Conceptual Framework
Closing process
Partnership
19. A legal entity that is seperate from its owners.
Corporations
Stock
Sole Propietorship
Managerial Accounting
20. Process of recording transactions in a journal.
Unearned Revenues
Journalizing
Debit
Shareholders
21. Business owned by a single person.
Sole Propietorship
Audit
Deficit
Ethics
22. Assets pulled out of the business by the owner.
Debit
Owner Withdrawals
Sole Propietorship
Revenues
23. Area of accounting aimed mainly at serving external users.
Current Liabilities
Financial Accounting
Corporation
Sole Propietorship
24. Accounting information is based on cost with potential subsequent adjustments to fair value.
Risk Tolerance
Account Balance
Unearned Revenue
Measurement Principle
25. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Money Market Account
Posting
Natural Business Years
Materiality Constraint
26. Rules that specify acceptable accounting practices.
Deficit
Posting
Generally Accepted Accounting Principles
SEC (Securites and Exchange Commision)
27. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Cash Basis Accounting
Equity
Assets
Internal users
28. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern Assumptions
Expanded Accounting Equation
Common Stock
Risk
29. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Shares
Trial balance
Contra Account
Balance Column Account
30. Independent group of full-time members responsible for setting accounting rules.
Financial Accounting Standards Board
Prepaid Expenses
Statement of Cash Flows
Plant Assets
31. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Trial balance
Account
Plant Assets
Common Stock
32. Owners of a corporation who usually receive dividends. Also called shareholders.
Securities and Exchange Commission
Ponzi Scheme
Stockholders
Common Stock
33. The money left over when income exceeds expenditure.
Owner Withdrawals
Bonds
Full Disclosure Principle
Surplus
34. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Work Sheet
Net Loss
Secured Loan
Balance Sheet
35. Expenses that remain the same regardless of the circumstances.
Interim Financial Statements
Shareholders
Fixed Expense
Return on Assets
36. 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.
Bonds
Fixed Expense
Securities and Exchange Commission
Income Summary
37. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Working Papers
SEC (Securites and Exchange Commision)
Classified Balance Sheet
External Transactions
38. Income from investments - including dividends - interest - or the sale of a property.
Portfolio Income
Net Income
IPO
Creditors
39. 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.
Accounting
Debit
Expense Recognition Principle
Federal Reserve System
40. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Long Term Liabilities
Operating Cycle
Posting
Adjusting Entry
41. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Natural Business Years
Conceptual Framework
Return
Book Value
42. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
CD (Certificate of Deposit)
Federal Reserve System
Intangible assets
Cost Principle
43. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Events
Common Stock
Balance Column Account
Revenues
44. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Secured Loan
International Financial Reporting Standards
Debit
Unadjusted Trial Balance
45. 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
Accounting Period
Stock
IRA (Individual Retirement Account)
Expanded Accounting Equation
46. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Owner Withdrawals
Posting Reference Column
Profit Margin
Depreciation
47. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Accounting Equation
Account Balance
Cash Basis Accounting
Accounting Cycle
48. Tool used to show the effects of transactions and events on individual accounts.
Sole Propietorship
Assets
T Account
Cost Principle
49. Assets put into the business by the owner.
Owner Investment
Going-concern Assumptions
Debt Ratio
Managerial Accounting
50. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
IPO
Financial Accounting
Unsecured Loan
Conceptual Framework