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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. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Balance Sheet
Unearned Revenues
Long Term Liabilities
Posting
2. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Closing Entries
Double Entry Accounting
Current Ratio
Credit
3. 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.
Partnership Agreement
Accrued Revenues
NYSE (New York Stock Exchange)
International Accounting Standards Board
4. Income that is available after all of the essential financial commitments have been paid.
Shareholders
Generally Accepted Accounting Principles
SMART Goal
Discretionary Income
5. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Risk Tolerance
Unclassified Balance Sheets
Contra Account
Matching Principle (or Expense Recognition Principle)
6. A loan that is backed by collateral such as cars - houses - or other assets.
Unclassified Balance Sheets
Secured Loan
SEC (Securites and Exchange Commision)
Journal
7. Business owned by two or more people.
Ethical Dilemma
Debtors
Full Disclosure Principle
Partnership
8. Items paid for in advance of receiving their benefits. Classified as assets.
Unearned Revenue
Prepaid Expenses
Intangible assets
Monetary Unit Assumption
9. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Current Assets
Federal Reserve System
Full Disclosure Principle
Long Term Liabilities
10. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Cost Principle
Deficit
Source Documents
Accrued Revenues
11. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Account
Accrued Revenues
Compound Journal Entries
Ethics
12. Persons using accounting information who are not directly involved in running the organization.
Stock
External Users
Internal transactions
Adjusted Trial Balance
13. 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.
Sole Proprietorship
Owner - Capital
International Financial Reporting Standards
Reversing Entries
14. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Assets
Accrual Basis Accounting
Closing process
Common Stock
15. Individuals or organizations entitled to receive payments
Generally Accepted Accounting Principles
Revenues
Creditors
Double Entry Accounting
16. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Net Income
Limited Liability Corporation
Temporary Accounts
Straight-line Depreciation Method
17. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Matching Principle (or Expense Recognition Principle)
Return on Assets
Common Stock
Closing Entries
18. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Permanent Accounts
Depreciation
Net Loss
Portfolio Income
19. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Securities
Income Summary
Deficit
Straight-line Depreciation Method
20. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Ethical Dilemma
Unearned Revenues
Cost-benefit Constraint
Acquisition
21. 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
Book Value
Sarbanes-Oxley Act (SOX)
Profit Margin
Contra Account
22. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Owner - Capital
Prepaid Expenses
NASDAQ
Going-concern Assumptions
23. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
NYSE (New York Stock Exchange)
Cash Basis Accounting
Straight-line Depreciation Method
Unsecured Loan
24. 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.
Corporations
SMART Goal
Reversing Entries
Money Market Account
25. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Accrual Basis Accounting
Long Term Investments
Present Value
Sole Proprietorship
26. 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.
Current Assets
Bonds
IRA (Individual Retirement Account)
Accounting Equation
27. Owners of a corporation who usually receive dividends. Also called shareholders.
Common Stock
IPO
Stockholders
Financial Accounting
28. Tool used to show the effects of transactions and events on individual accounts.
Sole Propietorship
T Account
Permanent Accounts
Assets
29. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Limited Liability Corporation
Depreciation
External Users
Income Summary
30. 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.
Fixed Expense
Temporary Accounts
Ponzi Scheme
Classified Balance Sheet
31. Difference between total debits and total credits (including the beginning balance) for an account.
SMART Goal
Accrual Basis Accounting
Account Balance
IPO
32. Assets pulled out of the business by the owner.
Fixed Expense
Owner Withdrawals
Reversing Entries
Accrual Basis Accounting
33. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Operating Cycle
Double Entry Accounting
Chart of Accounts
Ledger
34. Independent group of full-time members responsible for setting accounting rules.
Financial Accounting Standards Board
Events
Trial balance
Prepaid Expenses
35. Principle that assumes transactions and events can be expressed in money units.
Balance Column Account
Monetary Unit Assumption
Preferred Stock
Mergers
36. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Adjusted Trial Balance
Accounting Equation
Matching Principle
Audit
37. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Accounting Equation
Time Period Assumptions
Federal Reserve System
Fiscal Year
38. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Debit
Income Summary
Closing process
Business Entity Assumption
39. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Debt Ratio
Matching Principle
CD (Certificate of Deposit)
International Accounting Standards Board
40. 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.
NASDAQ
Plant Assets
NYSE (New York Stock Exchange)
Risk Tolerance
41. The value of a future cash steam discounted at the appropriate market interest rate.
International Accounting Standards Board
Present Value
Accounting Period
Sole Proprietorship
42. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Accounting Cycle
Managerial Accounting
Permanent Accounts
Unclassified Balance Sheets
43. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Book Value
Accrued Revenues
Compound Journal Entries
Current Liabilities
44. The combining of two or more comapnies into one larger company.
Mergers
Revenues
Sole Propietorship
Journalizing
45. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Matching Principle
Shares
NYSE (New York Stock Exchange)
Risk
46. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Time Period Assumptions
Unsecured Loan
International Financial Reporting Standards
Source Documents
47. Accounting standards set by the IASB which aim to develop a single set of global standards - to promote those standards - and converge national and international standards globally.
Chart of Accounts
International Financial Reporting Standards
Business Entity Assumption
CD (Certificate of Deposit)
48. Monies (or sums of money) received from an investment; often in percent form.
Source Documents
Post Closing Trial Balance
Securities and Exchange Commission
Return
49. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Internal users
Matching Principle (or Expense Recognition Principle)
Passive Income
External Users
50. The money left over when income exceeds expenditure.
Expense Recognition Principle
Present Value
Internal users
Surplus