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Test your basic knowledge |
DSST Principles Of Finance
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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. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Plant Assets
Chart of Accounts
Financial Accounting
2. 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.
Accrual Basis Accounting
Full Disclosure Principle
Varaiable Expense
Bonds
3. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Sole Proprietorship
Business Entity Assumption
Ledger
Book Value
4. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Assets
Expense Recognition Principle
Accrual Basis Accounting
Net Income
5. Income from investments - including dividends - interest - or the sale of a property.
Portfolio Income
Common Stock
Passive Income
Compound Journal Entries
6. Assets put into the business by the owner.
Owner Investment
Common Stock
Owner - Capital
SEC (Securites and Exchange Commision)
7. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Debit
Accounting Equation
Preferred Stock
Federal Reserve System
8. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Financial Accounting
Closing process
Surplus
Annual Financial Statements
9. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Internal users
Equity
International Accounting Standards Board
Income Statement
10. 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.
Liabilities
Revenues
Financial Accounting
Ethics
11. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Cash Basis Accounting
Stock
Ethical Dilemma
Statement of Cash Flows
12. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Cash Basis Accounting
Owner - Capital
Time Period Assumptions
Going-concern Assumptions
13. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Net Income
Conceptual Framework
Sole Proprietorship
Bailout
14. 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
Expanded Accounting Equation
Return
Current Assets
Fiscal Year
15. 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.
Balance Sheet
Equity
Generally Accepted Accounting Principles
Internal users
16. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Accrued Expenses
Surplus
Post Closing Trial Balance
CD (Certificate of Deposit)
17. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Business Entity Assumption
Prepaid Expenses
Accrued Expenses
SMART Goal
18. An acronym for the National Association of Securities Dealers Automated Quotations. NASDAQ was founded in 1970 and is the largest electronic stock exchange in the United States. Unlike the NYSE - it has no physical location - existing entirely on cyb
Accrued Revenues
Fixed Expense
Full Disclosure Principle
NASDAQ
19. Owners of a corporation who usually receive dividends. Also called stockholders.
Time Period Assumptions
Shareholders
Events
Long Term Liabilities
20. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Profit Margin
Expanded Accounting Equation
Balance Sheet
Ethics
21. Difference between total debits and total credits (including the beginning balance) for an account.
Money Market Account
Current Assets
Assets
Account Balance
22. Independent group of full-time members responsible for setting accounting rules.
Financial Accounting Standards Board
Owner Withdrawals
Securities and Exchange Commission
Journalizing
23. Journal entries that affect at least three accounts.
Passive Income
CD (Certificate of Deposit)
Ledger
Compound Journal Entries
24. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Plant Assets
Bailout
Mergers
Temporary Accounts
25. 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.
Common Stock
Unadjusted Trial Balance
Net Income
International Financial Reporting Standards
26. The combining of two or more comapnies into one larger company.
Classified Balance Sheet
Mergers
Going-concern Assumptions
Bailout
27. Temporary account used only in the closing process to which the balances of revenue and expense accounts (including any gains or losses) are transferred. Its balance is transferred to the capital account (or retained earnings for a corporation).
Accrued Revenues
Double Entry Accounting
Income Summary
Interim Financial Statements
28. The first time a company sells shares of its stock to the public.
Corporation
Full Disclosure Principle
Ethical Dilemma
IPO
29. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Risk Tolerance
Debt Ratio
Varaiable Expense
Statement of Cash Flows
30. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Posting Reference Column
NYSE (New York Stock Exchange)
Managerial Accounting
Full Disclosure Principle
31. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Annual Financial Statements
Accrued Expenses
Prepaid Expenses
Unearned Revenues
32. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Limited Liability Corporation
Debtors
Adjusted Trial Balance
Income Summary
33. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Posting Reference Column
Accrual Basis Accounting
Unsecured Loan
Prepaid Expenses
34. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Generally Accepted Accounting Principles
Sole Proprietorship
Time Period Assumptions
Recordkeeping
35. Process of recording transactions in a journal.
Business Entity Assumption
Present Value
Internal transactions
Journalizing
36. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Post Closing Trial Balance
SEC (Securites and Exchange Commision)
Present Value
Debt Ratio
37. Record containing all accounts (with amounts) for a business.
Risk
Common Stock
Unadjusted Trial Balance
Ledger
38. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Common Stock
Post Closing Trial Balance
Corporation
Portfolio Income
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.
Debit
General Journal
Federal Reserve System
Time Period Assumptions
40. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Unearned Revenue
Return
Matching Principle (or Expense Recognition Principle)
Income Summary
41. Business owned by one person that is not organized as a corporation.
Monetary Unit Assumption
Time Period Assumptions
Sole Proprietorship
Conceptual Framework
42. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Passive Income
Interim Financial Statements
Expenses
SEC (Securites and Exchange Commision)
43. Length of time covered by financial statements; also called reporting period.
Debit
Partnership
Accounting Period
Statement of Owner's Equity
44. The twelve month period that ends when a company's sales activities are at their lowest point.
Account Balance
Events
NYSE (New York Stock Exchange)
Natural Business Years
45. Loaning or giving money to a business in orer to save it from bankruptcy.
SMART Goal
Accounting
Securities
Bailout
46. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Accounting Cycle
Secured Loan
Shares
Closing Entries
47. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Accounting Equation
Current Assets
Operating Cycle
Business Entity Assumption
48. Happenings that both affect an organization's financial position and can be reliably measured.
Financial Accounting Standards Board
Revenue Recognition Principle
Risk Tolerance
Events
49. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Trial balance
SMART Goal
Cost-benefit Constraint
Income Summary
50. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Journalizing
Accounting
Audit
Equity