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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. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.






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






3. Assets put into the business by the owner.






4. Balance sheet that broadly groups assets - liabilities - and equity accounts.






5. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.






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






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






8. Loaning or giving money to a business in orer to save it from bankruptcy.






9. An investment scam that uses the assets from new investors to make payments to older investors. Named after Charles Ponzi who used the technique in the early 1900s to defraud thousands of investors.






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






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






12. The combining of two or more comapnies into one larger company.






13. Process of transferring journal entry information to the ledger; computerized systems automate this process.






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






15. Activities within an organization that can affect the accounting equation.






16. 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).






17. Individuals or organizations entitled to receive payments






18. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.






19. 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.






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






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






22. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.






23. Persons using accounting information who are directly involved in managing the organization.






24. 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.






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






26. Journal entries that affect at least three accounts.






27. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity






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






29. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.






30. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.






31. Principle that assumes transactions and events can be expressed in money units.






32. Report of changes in equity over a period; adjusted for increases and for decreases.

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33. Business owned by a single person.






34. 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.






35. 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.






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






37. Process of recording transactions in a journal.






38. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.






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






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






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






42. 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.






43. 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.






44. Independent group of full-time members responsible for setting accounting rules.






45. Rules that specify acceptable accounting practices.






46. Gross increase in equity from a company's business activities that earn income.






47. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.






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






49. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.






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







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