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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. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Income Statement
Income Summary
Debt Ratio
Corporation
2. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Expenses
Post Closing Trial Balance
Annual Financial Statements
Time Period Assumptions
3. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Intangible assets
External Transactions
Chart of Accounts
Cash Basis Accounting
4. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Temporary Accounts
Net Income
Sole Proprietorship
Annual Financial Statements
5. Difference between total debits and total credits (including the beginning balance) for an account.
Account Balance
Balance Column Account
IRA (Individual Retirement Account)
Long Term Liabilities
6. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Sole Proprietorship
Risk Tolerance
Debit
Operating Cycle
7. Monies (or sums of money) received from an investment; often in percent form.
Owner - Capital
Closing process
Return
Financial Accounting
8. Gross increase in equity from a company's business activities that earn income.
Prepaid Expenses
Journal
Revenues
Ledger
9. 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.
Ledger
Stockholders
Conceptual Framework
Matching Principle
10. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Conceptual Framework
Events
Journal
Contra Account
11. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
Corporation
Time Period Assumptions
Operating Cycle
12. 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.
Ethics
Owner - Capital
Unsecured Loan
NYSE (New York Stock Exchange)
13. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
T Account
Risk
Natural Business Years
Partnership
14. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
IPO
Debtors
Unearned Revenue
Money Market Account
15. 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.
Conceptual Framework
Common Stock
Acquisition
Return
16. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Book Value
Profit Margin
Partnership
Long Term Liabilities
17. Business owned by a single person.
Sole Proprietorship
Sole Propietorship
Generally Accepted Accounting Principles
Corporations
18. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
SEC (Securites and Exchange Commision)
Adjusting Entry
Securities
Post Closing Trial Balance
19. Length of time covered by financial statements; also called reporting period.
SMART Goal
Expanded Accounting Equation
Accounting Period
Book Value
20. Individuals hired to review financial reports and information systems of organizations.
Temporary Accounts
Measurement Principle
Financial Accounting Standards Board
Auditors
21. Process of recording transactions in a journal.
Deficit
IPO
Journalizing
Plant Assets
22. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Partnership Agreement
Return
Bookkeeping
Accrual Basis Accounting
23. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
T Account
Accounting Equation
Securities
Return
24. Owners of a corporation who usually receive dividends. Also called shareholders.
Stockholders
Bonds
Sole Proprietorship
Expanded Accounting Equation
25. Income from investments - including dividends - interest - or the sale of a property.
Portfolio Income
Profit Margin
External Transactions
Cost-benefit Constraint
26. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Current Assets
Accounting Period
External Users
Pro Forma Financial Statement
27. All purpose journal for recording the debits and credits of transactions and events.
External Users
Discretionary Income
Classified Balance Sheet
General Journal
28. Report of changes in equity over a period; adjusted for increases and for decreases.
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29. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Fiscal Year
Posting
Events
Common Stock
30. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Plant Assets
Materiality Constraint
Time Period Assumptions
Corporation
31. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Net Loss
Return on Assets
Long Term Investments
Profit Margin
32. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Return
Statement of Cash Flows
Closing process
Expanded Accounting Equation
33. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
International Accounting Standards Board
Business Entity Assumption
Posting Reference Column
Working Papers
34. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Securities
Preferred Stock
Bonds
Working Papers
35. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Trial balance
Acquisition
Federal Reserve System
Ethics
36. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Ledger
Unearned Revenue
Business Entity Assumption
Surplus
37. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Statement of Owner's Equity
External Users
Profit Margin
Securities and Exchange Commission
38. Exchanges of economic value between one entity and another entity.
External Transactions
Accounting
Stockholders
Owner Withdrawals
39. Happenings that both affect an organization's financial position and can be reliably measured.
Risk
Closing Entries
Events
Passive Income
40. A loan that is backed by collateral such as cars - houses - or other assets.
Full Disclosure Principle
Partnership Agreement
Secured Loan
Working Papers
41. The twelve month period that ends when a company's sales activities are at their lowest point.
Natural Business Years
Fixed Expense
Journalizing
Accounting
42. 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.
Equity
Time Period Assumptions
Cash Basis Accounting
IRA (Individual Retirement Account)
43. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Monetary Unit Assumption
Statement of Cash Flows
Equity
Temporary Accounts
44. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Shares
Bailout
Net Loss
Time Period Assumptions
45. Activities within an organization that can affect the accounting equation.
Common Stock
Internal transactions
Long Term Investments
Cash Basis Accounting
46. 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.
Reversing Entries
Net Loss
Sole Proprietorship
Account
47. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Expenses
Depreciation
Account
Closing process
48. 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
Events
Posting
NYSE (New York Stock Exchange)
49. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
Expense Recognition Principle
Sole Proprietorship
Closing process
50. Revenues earned in a period that both unrecorded and not yet received in cash (or other assets; adjusting entries for recording accrued revenues involve increasing assets and increasing revenues.
Going-concern Assumptions
Unclassified Balance Sheets
Accrued Revenues
Partnership