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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. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Bailout
Measurement Principle
Acquisition
Partnership
2. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Ethical Dilemma
Stockholders
Current Liabilities
Generally Accepted Accounting Principles
3. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Account Balance
Long Term Liabilities
Return
Long Term Investments
4. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Deficit
Unearned Revenues
Stock
Prepaid Expenses
5. 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.
Expanded Accounting Equation
Matching Principle
Cost Principle
Accounting Cycle
6. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Cost Principle
Corporations
Managerial Accounting
Net Income
7. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Interim Financial Statements
Reversing Entries
Unclassified Balance Sheets
Compound Journal Entries
8. The principle prescribing that revenue is recognized when earned.
Bookkeeping
Unearned Revenues
Revenue Recognition Principle
Debt Ratio
9. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Fixed Expense
Bookkeeping
Work Sheet
Materiality Constraint
10. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Work Sheet
Balance Sheet
Current Assets
International Accounting Standards Board
11. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Full Disclosure Principle
Cash Basis Accounting
Current Liabilities
Deficit
12. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Ponzi Scheme
Cost Principle
External Users
Statement of Cash Flows
13. 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.
Events
Statement of Cash Flows
Equity
Current Liabilities
14. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Long Term Investments
Internal users
Shareholders
Matching Principle (or Expense Recognition Principle)
15. Owners of a corporation who usually receive dividends. Also called stockholders.
Shareholders
Plant Assets
Cash Basis Accounting
External Transactions
16. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
International Financial Reporting Standards
Business Entity Assumption
Monetary Unit Assumption
Common Stock
17. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Expenses
Assets
SEC (Securites and Exchange Commision)
CD (Certificate of Deposit)
18. 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.
Work Sheet
Revenue Recognition Principle
Common Stock
Federal Reserve System
19. The NYSE was founded in 1792 and is the oldest and larvest securities market in the United States. it is located on Wall Street in New York.
Profit Margin
Limited Liability Corporation
NYSE (New York Stock Exchange)
T Account
20. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Securities and Exchange Commission
Common Stock
Matching Principle (or Expense Recognition Principle)
Adjusted Trial Balance
21. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Securities and Exchange Commission
Unsecured Loan
Assets
22. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Journal
Adjusted Trial Balance
Securities
Working Papers
23. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Journal
Cost-benefit Constraint
Conceptual Framework
Accrual Basis Accounting
24. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Credit
Risk Tolerance
Plant Assets
Closing process
25. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Auditors
Ethical Dilemma
Ethics
Current Assets
26. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Natural Business Years
Return on Assets
Accounting Equation
International Accounting Standards Board
27. Excess of expenses over revenues for a period.
Net Loss
Post Closing Trial Balance
Closing process
Partnership
28. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Ethical Dilemma
Common Stock
Revenues
Passive Income
29. 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.
Natural Business Years
Ponzi Scheme
Internal transactions
Trial balance
30. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Credit
Adjusting Entry
Secured Loan
Ledger
31. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Limited Liability Corporation
Mergers
Compound Journal Entries
Natural Business Years
32. 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 (or Expense Recognition Principle)
Stock
Permanent Accounts
Double Entry Accounting
33. Owners of a corporation who usually receive dividends. Also called shareholders.
Permanent Accounts
Credit
Stockholders
Unearned Revenues
34. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unearned Revenues
Credit
Unsecured Loan
Internal users
35. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Owner Investment
Passive Income
Unclassified Balance Sheets
Current Liabilities
36. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Book Value
Assets
Matching Principle (or Expense Recognition Principle)
Bookkeeping
37. Account showing the owner's claim on company assets; equals owner investments plus net income (or less net loss) minus owner withdrawals since the company's inception. Also called Equity.
Bonds
Owner - Capital
Credit
Reversing Entries
38. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Adjusted Trial Balance
Accrual Basis Accounting
Trial balance
IPO
39. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Closing process
Corporations
Pro Forma Financial Statement
Classified Balance Sheet
40. Journal entry at the end of an accounting period to bring an asset or liability account to its proper amount and update the related expenses or revenue account.
Expenses
Adjusting Entry
Risk Tolerance
Recordkeeping
41. Accounting information is based on cost with potential subsequent adjustments to fair value.
Financial Accounting
Measurement Principle
Secured Loan
Operating Cycle
42. Loaning or giving money to a business in orer to save it from bankruptcy.
Financial Accounting
Stockholders
Return
Bailout
43. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Account Balance
Accrued Expenses
Cash Basis Accounting
Shareholders
44. Persons using accounting information who are not directly involved in running the organization.
External Users
Posting Reference Column
Measurement Principle
Account Balance
45. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Depreciation
Debtors
Income Summary
Debit
46. Individuals hired to review financial reports and information systems of organizations.
Passive Income
Auditors
Return on Assets
Ledger
47. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Intangible assets
Adjusted Trial Balance
Bookkeeping
Corporation
48. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
International Accounting Standards Board
Bookkeeping
Surplus
Fixed Expense
49. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Partnership Agreement
Full Disclosure Principle
Time Period Assumptions
Securities
50. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Cost-benefit Constraint
Source Documents
Accounting Equation
Net Income