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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. The twelve month period that ends when a company's sales activities are at their lowest point.
Natural Business Years
Work Sheet
Reversing Entries
Preferred Stock
2. Persons using accounting information who are directly involved in managing the organization.
Balance Column Account
Internal users
Journal
Fiscal Year
3. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Auditors
Pro Forma Financial Statement
Audit
Accrued Expenses
4. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Post Closing Trial Balance
Long Term Liabilities
Accounting Equation
NYSE (New York Stock Exchange)
5. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
International Accounting Standards Board
Permanent Accounts
Time Period Assumptions
Limited Liability Corporation
6. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Matching Principle (or Expense Recognition Principle)
Plant Assets
Owner Investment
Assets
7. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Common Stock
Securities and Exchange Commission
Posting
Accounting Period
8. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Operating Cycle
Unsecured Loan
Trial balance
Monetary Unit Assumption
9. A legal entity that is seperate from its owners.
Closing Entries
Recordkeeping
Income Summary
Corporations
10. 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
Current Liabilities
Deficit
Sarbanes-Oxley Act (SOX)
Straight-line Depreciation Method
11. Uncertainty about expected return.
Temporary Accounts
Measurement Principle
Profit Margin
Risk
12. A tax deferred account that allows individuals to plan for their retirement.
Journal
Closing Entries
IRA (Individual Retirement Account)
Passive Income
13. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Income Statement
Corporation
Common Stock
Current Liabilities
14. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Sole Proprietorship
Passive Income
Adjusted Trial Balance
Account
15. Gross increase in equity from a company's business activities that earn income.
Surplus
Revenues
Time Period Assumptions
Measurement Principle
16. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Conceptual Framework
Deficit
Accrued Revenues
Cash Basis Accounting
17. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Post Closing Trial Balance
Journalizing
Stock
NYSE (New York Stock Exchange)
18. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Ponzi Scheme
Corporations
Unclassified Balance Sheets
Permanent Accounts
19. 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.
Ponzi Scheme
Depreciation
Compound Journal Entries
Accrued Expenses
20. The first time a company sells shares of its stock to the public.
Return
Partnership
IPO
Managerial Accounting
21. Items paid for in advance of receiving their benefits. Classified as assets.
Trial balance
Revenue Recognition Principle
Prepaid Expenses
Monetary Unit Assumption
22. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Unclassified Balance Sheets
Deficit
Recordkeeping
Assets
23. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Matching Principle (or Expense Recognition Principle)
Owner Investment
NYSE (New York Stock Exchange)
Risk Tolerance
24. 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).
Current Liabilities
Income Summary
Post Closing Trial Balance
External Users
25. Tool used to show the effects of transactions and events on individual accounts.
Depreciation
IPO
T Account
Net Loss
26. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Account Balance
Securities and Exchange Commission
Statement of Cash Flows
Contra Account
27. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Partnership
Accounting
Account
Depreciation
28. Journal entries that affect at least three accounts.
Compound Journal Entries
Straight-line Depreciation Method
Accrual Basis Accounting
Balance Column Account
29. 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
Book Value
NASDAQ
Journal
Unadjusted Trial Balance
30. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Audit
Compound Journal Entries
Federal Reserve System
Managerial Accounting
31. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Ledger
Full Disclosure Principle
Materiality Constraint
Balance Column Account
32. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Common Stock
Limited Liability Corporation
Post Closing Trial Balance
Working Papers
33. Loaning or giving money to a business in orer to save it from bankruptcy.
Bailout
Generally Accepted Accounting Principles
SMART Goal
Cash Basis Accounting
34. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Risk
Net Income
Passive Income
IPO
35. The combining of two or more comapnies into one larger company.
Portfolio Income
Auditors
Accounting Cycle
Mergers
36. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Common Stock
Managerial Accounting
Internal transactions
Plant Assets
37. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Trial balance
Credit
NYSE (New York Stock Exchange)
Sarbanes-Oxley Act (SOX)
38. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
External Users
Financial Accounting
Accrued Revenues
International Accounting Standards Board
39. Record containing all accounts (with amounts) for a business.
Liabilities
Cost-benefit Constraint
Balance Column Account
Ledger
40. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Materiality Constraint
Journal
Annual Financial Statements
Common Stock
41. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Return
Unearned Revenues
Working Papers
Posting Reference Column
42. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Permanent Accounts
Discretionary Income
Accounting Equation
Adjusted Trial Balance
43. Prescribes expenses to be reported in the same period as the revenues that were eared as a result of the expenses. Also called the Matching Principle.
Securities and Exchange Commission
Expense Recognition Principle
Source Documents
External Transactions
44. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Time Period Assumptions
Shareholders
Partnership
Unearned Revenues
45. 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.
Compound Journal Entries
International Financial Reporting Standards
IPO
Cost-benefit Constraint
46. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Full Disclosure Principle
Cost Principle
Permanent Accounts
External Users
47. List of accounts and balances prepared before accounting adjustments are recorded and posted.
General Journal
Permanent Accounts
Unadjusted Trial Balance
Recordkeeping
48. A loan that is backed by collateral such as cars - houses - or other assets.
CD (Certificate of Deposit)
Conceptual Framework
Secured Loan
Federal Reserve System
49. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Annual Financial Statements
Recordkeeping
General Journal
Work Sheet
50. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Debt Ratio
Corporation
Profit Margin
Creditors