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DSST Principles Of Finance
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Subjects
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dsst
,
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Long Term Investments
Income Summary
Common Stock
Unearned Revenues
2. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Risk Tolerance
Stockholders
Operating Cycle
Current Assets
3. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Conceptual Framework
Post Closing Trial Balance
Money Market Account
Current Assets
4. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Assets
Accrual Basis Accounting
Sole Propietorship
Work Sheet
5. Assets put into the business by the owner.
Double Entry Accounting
Current Assets
Expanded Accounting Equation
Owner Investment
6. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Auditors
Securities
Pro Forma Financial Statement
Partnership
7. Goals that are specific - measurable - attainable - realistic - and time bound.
Fiscal Year
Accrued Revenues
SMART Goal
Deficit
8. Assets pulled out of the business by the owner.
Fixed Expense
IPO
Owner Withdrawals
Account
9. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Risk
Closing process
Shareholders
Fiscal Year
10. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Posting Reference Column
Contra Account
Going-concern Assumptions
Full Disclosure Principle
11. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Auditors
International Financial Reporting Standards
Business Entity Assumption
Sole Proprietorship
12. Journal entries that affect at least three accounts.
General Journal
Interim Financial Statements
Compound Journal Entries
Account Balance
13. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Balance Column Account
Contra Account
Income Summary
Adjusting Entry
14. 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.
Income Statement
Equity
Financial Accounting
Expense Recognition Principle
15. Principle that assumes transactions and events can be expressed in money units.
Partnership Agreement
Contra Account
Monetary Unit Assumption
Fiscal Year
16. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Common Stock
Long Term Investments
Passive Income
Fiscal Year
17. Independent group of full-time members responsible for setting accounting rules.
Securities
Financial Accounting Standards Board
Credit
Debt Ratio
18. Expenses that remain the same regardless of the circumstances.
Fixed Expense
Financial Accounting Standards Board
Unearned Revenue
Financial Accounting
19. 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.
Preferred Stock
Recordkeeping
Reversing Entries
Accrual Basis Accounting
20. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Partnership Agreement
Varaiable Expense
Journalizing
Conceptual Framework
21. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Statement of Owner's Equity
CD (Certificate of Deposit)
Full Disclosure Principle
Secured Loan
22. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Sole Proprietorship
IPO
Partnership
External Users
23. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Balance Sheet
Conceptual Framework
Matching Principle
Accounting Cycle
24. List of accounts used by a company' includes and identification number for each account.
Preferred Stock
Measurement Principle
Chart of Accounts
Shareholders
25. Items paid for in advance of receiving their benefits. Classified as assets.
Acquisition
Long Term Investments
Prepaid Expenses
International Accounting Standards Board
26. The first time a company sells shares of its stock to the public.
IPO
Cost-benefit Constraint
Ledger
Assets
27. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Conceptual Framework
Balance Sheet
Account
Surplus
28. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Depreciation
Work Sheet
Reversing Entries
Adjusted Trial Balance
29. Activities within an organization that can affect the accounting equation.
Internal transactions
Bailout
Chart of Accounts
Time Period Assumptions
30. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Sole Proprietorship
Passive Income
Unadjusted Trial Balance
Accounting Period
31. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Expanded Accounting Equation
Reversing Entries
Balance Column Account
Ethics
32. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Statement of Owner's Equity
Temporary Accounts
Time Period Assumptions
Unclassified Balance Sheets
33. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenue
Time Period Assumptions
Owner Investment
Bonds
34. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Audit
Return on Assets
Measurement Principle
Accrued Expenses
35. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Current Liabilities
Monetary Unit Assumption
Return on Assets
Shareholders
36. Individuals hired to review financial reports and information systems of organizations.
Business Entity Assumption
Financial Accounting
Interim Financial Statements
Auditors
37. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Unearned Revenue
Intangible assets
Financial Accounting Standards Board
Annual Financial Statements
38. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
External Transactions
Owner Investment
Journal
Ethical Dilemma
39. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Bailout
Financial Accounting
Classified Balance Sheet
Bonds
40. Accounting information is based on cost with potential subsequent adjustments to fair value.
Depreciation
Long Term Liabilities
Measurement Principle
Statement of Owner's Equity
41. Length of time covered by financial statements; also called reporting period.
International Financial Reporting Standards
Account Balance
Accounting Period
Revenues
42. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Debit
Posting
Return on Assets
Ethical Dilemma
43. The principle prescribing that revenue is recognized when earned.
Natural Business Years
Creditors
Revenue Recognition Principle
Posting Reference Column
44. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Unearned Revenues
Time Period Assumptions
Monetary Unit Assumption
Full Disclosure Principle
45. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Permanent Accounts
Source Documents
Expanded Accounting Equation
Federal Reserve System
46. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
NYSE (New York Stock Exchange)
Stock
Money Market Account
Straight-line Depreciation Method
47. Business owned by one person that is not organized as a corporation.
Common Stock
Unsecured Loan
Audit
Sole Proprietorship
48. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Profit Margin
Return on Assets
Straight-line Depreciation Method
Unsecured Loan
49. The value of a future cash steam discounted at the appropriate market interest rate.
Risk Tolerance
Audit
Present Value
External Users
50. The twelve month period that ends when a company's sales activities are at their lowest point.
Profit Margin
Natural Business Years
Return
Debt Ratio
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