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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. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.






2. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.






3. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.






4. A legal entity that is seperate from its owners.






5. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.






6. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.






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






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






9. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.






10. Statements that show the effect of proposed transactions and events as if they had occurred.






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






12. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.






13. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.






14. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.






15. The money left over when income exceeds expenditure.






16. Resources that a company owns or controls that are expected to provide current and future benefits to the business.






17. A loan that is backed by collateral such as cars - houses - or other assets.






18. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.






19. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.






20. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.






21. Difference between total debits and total credits (including the beginning balance) for an account.






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






23. Business owned by two or more people.






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






25. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.






26. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.






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






28. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.






29. Obligations not due to be paid within one year or the operating cycle - whichever is longer.






30. 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.






31. The principle prescribing that revenue is recognized when earned.






32. A written framework to guide the development - preparation - and interpretation of financial accounting information.






33. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.






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






35. Individuals hired to review financial reports and information systems of organizations.






36. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.






37. Unincorporated association of two or more persons to pursue a business for profit as co-owners.






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






39. Outflows or using up of assets as part of operations of business to generate sales.






40. Amount earned after subtracting all expenses necessary for and matched with sales for a period.






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






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






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






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






45. Record containing all accounts (with amounts) for a business.






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.






47. Goals that are specific - measurable - attainable - realistic - and time bound.






48. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.






49. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.






50. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.