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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. 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).
Profit Margin
Measurement Principle
Closing process
Income Summary
2. Activities within an organization that can affect the accounting equation.
Internal transactions
Adjusting Entry
Shareholders
Accounting Cycle
3. All purpose journal for recording the debits and credits of transactions and events.
Monetary Unit Assumption
Classified Balance Sheet
Chart of Accounts
General Journal
4. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Return on Assets
Accounting Cycle
Cost-benefit Constraint
Measurement Principle
5. Individuals or organizations entitled to receive payments
Matching Principle
Creditors
Long Term Liabilities
Measurement Principle
6. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Income Statement
Owner Withdrawals
Unclassified Balance Sheets
General Journal
7. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Long Term Liabilities
IPO
Balance Sheet
Partnership
8. Individuals or organizations that owe money.
Accounting Equation
Debtors
Cost-benefit Constraint
Current Liabilities
9. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Going-concern Assumptions
Partnership
Shares
Common Stock
10. Principle that assumes transactions and events can be expressed in money units.
Acquisition
Monetary Unit Assumption
Source Documents
Pro Forma Financial Statement
11. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Revenues
General Journal
Unearned Revenue
Interim Financial Statements
12. 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.
Matching Principle
Time Period Assumptions
External Transactions
Bookkeeping
13. Outflows or using up of assets as part of operations of business to generate sales.
Journal
Expenses
Partnership Agreement
Securities and Exchange Commission
14. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Securities and Exchange Commission
Annual Financial Statements
Sole Propietorship
IRA (Individual Retirement Account)
15. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Time Period Assumptions
Natural Business Years
Auditors
External Users
16. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Cash Basis Accounting
Ethics
Common Stock
Unclassified Balance Sheets
17. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Pro Forma Financial Statement
Materiality Constraint
Depreciation
Sarbanes-Oxley Act (SOX)
18. Create the Public Company Accounting Oversight Board - regulates analyst conflicts - imposes corporate governance requirements - enhances accounting and control disclosures - impacts insider transactions and executive loans - establishes new types of
Sarbanes-Oxley Act (SOX)
External Transactions
Present Value
Plant Assets
19. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Recordkeeping
Unadjusted Trial Balance
Partnership
Full Disclosure Principle
20. A security representing partial ownership of the company. It gives the holer priority to dividends over common stock investors. Capital stock that provides a specific dividend - which is paid before any dividends are pai to common stock holders - an
Bonds
Preferred Stock
International Accounting Standards Board
Reversing Entries
21. 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.
Temporary Accounts
Corporations
Income Statement
Unearned Revenues
22. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Auditors
SEC (Securites and Exchange Commision)
Current Assets
Classified Balance Sheet
23. A tax deferred account that allows individuals to plan for their retirement.
Unclassified Balance Sheets
Plant Assets
IRA (Individual Retirement Account)
Time Period Assumptions
24. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Accounting Equation
Common Stock
Long Term Liabilities
Profit Margin
25. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Current Liabilities
Debtors
Owner - Capital
Return on Assets
26. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Classified Balance Sheet
Accrued Expenses
Trial balance
Unearned Revenues
27. Owners of a corporation who usually receive dividends. Also called stockholders.
Portfolio Income
Ledger
Shareholders
Contra Account
28. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Temporary Accounts
Sole Proprietorship
Current Assets
Business Entity Assumption
29. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Sole Propietorship
Federal Reserve System
Time Period Assumptions
Acquisition
30. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Securities and Exchange Commission
Corporation
External Users
Passive Income
31. Persons using accounting information who are not directly involved in running the organization.
Full Disclosure Principle
External Users
Common Stock
Current Ratio
32. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Journal
Bailout
Plant Assets
Owner Investment
33. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Matching Principle
Unsecured Loan
Passive Income
Account
34. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Compound Journal Entries
Intangible assets
Present Value
Reversing Entries
35. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
NASDAQ
Expenses
Accounting Equation
Equity
36. An expense that changes from period to perio - such as food or gasoline costs.
Varaiable Expense
Measurement Principle
Closing Entries
Fixed Expense
37. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern Assumptions
International Financial Reporting Standards
Unearned Revenue
Sole Proprietorship
38. Excess of expenses over revenues for a period.
Pro Forma Financial Statement
Net Loss
Creditors
Revenues
39. The money left over when income exceeds expenditure.
Surplus
Securities and Exchange Commission
External Transactions
Common Stock
40. Gross increase in equity from a company's business activities that earn income.
Expanded Accounting Equation
Revenues
Accounting Cycle
Account
41. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Portfolio Income
Adjusted Trial Balance
External Transactions
Managerial Accounting
42. 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.
Corporation
SEC (Securites and Exchange Commision)
Unadjusted Trial Balance
Reversing Entries
43. 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.
NYSE (New York Stock Exchange)
Stockholders
Return
Credit
44. Loaning or giving money to a business in orer to save it from bankruptcy.
Going-concern Assumptions
Posting Reference Column
Owner Investment
Bailout
45. Assets put into the business by the owner.
Net Income
Owner Investment
SEC (Securites and Exchange Commision)
Income Statement
46. 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.
Journal
Bonds
Classified Balance Sheet
Liabilities
47. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Source Documents
Unearned Revenues
Mergers
Statement of Cash Flows
48. Individuals hired to review financial reports and information systems of organizations.
Varaiable Expense
Auditors
Matching Principle (or Expense Recognition Principle)
Internal transactions
49. 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.
Federal Reserve System
Fiscal Year
Straight-line Depreciation Method
Bonds
50. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Owner Investment
Current Ratio
Secured Loan
SMART Goal