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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).
Income Summary
Compound Journal Entries
Revenue Recognition Principle
International Accounting Standards Board
2. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Credit
Securities and Exchange Commission
Permanent Accounts
Journal
3. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
General Journal
Common Stock
Current Assets
Surplus
4. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Financial Accounting
Reversing Entries
Business Entity Assumption
Cash Basis Accounting
5. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Credit
Internal users
Financial Accounting
Operating Cycle
6. The twelve month period that ends when a company's sales activities are at their lowest point.
Matching Principle (or Expense Recognition Principle)
Posting Reference Column
Natural Business Years
Expanded Accounting Equation
7. Business owned by two or more people.
Temporary Accounts
Partnership
IRA (Individual Retirement Account)
Ethics
8. Income that is available after all of the essential financial commitments have been paid.
Discretionary Income
Matching Principle
Work Sheet
Operating Cycle
9. Individuals or organizations that owe money.
Partnership
Return
Portfolio Income
Debtors
10. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Debt Ratio
Shareholders
Adjusted Trial Balance
Going-concern Assumptions
11. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Double Entry Accounting
Common Stock
General Journal
Straight-line Depreciation Method
12. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Permanent Accounts
Adjusting Entry
Time Period Assumptions
Ledger
13. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Expense Recognition Principle
Temporary Accounts
Debt Ratio
Revenues
14. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Balance Column Account
Book Value
Straight-line Depreciation Method
General Journal
15. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Corporation
Plant Assets
Deficit
Debit
16. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Accounting Cycle
Contra Account
Unsecured Loan
Matching Principle
17. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Accrued Revenues
Audit
Matching Principle (or Expense Recognition Principle)
General Journal
18. 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
Generally Accepted Accounting Principles
Net Income
Cost-benefit Constraint
19. Principle that assumes transactions and events can be expressed in money units.
Partnership Agreement
Assets
Trial balance
Monetary Unit Assumption
20. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Deficit
Going-concern Assumptions
Federal Reserve System
CD (Certificate of Deposit)
21. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Common Stock
CD (Certificate of Deposit)
Permanent Accounts
Source Documents
22. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Revenues
Intangible assets
External Users
Unadjusted Trial Balance
23. Individuals hired to review financial reports and information systems of organizations.
Corporations
Auditors
Compound Journal Entries
Working Papers
24. Length of time covered by financial statements; also called reporting period.
Unsecured Loan
General Journal
Shareholders
Accounting Period
25. Business owned by one person that is not organized as a corporation.
Mergers
Sole Proprietorship
Shares
Current Ratio
26. Excess of expenses over revenues for a period.
Sole Propietorship
Matching Principle
Net Loss
Expense Recognition Principle
27. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Acquisition
Mergers
Sole Propietorship
Fiscal Year
28. 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
External Transactions
Preferred Stock
Business Entity Assumption
Mergers
29. The money left over when income exceeds expenditure.
Cost Principle
Accrued Expenses
Secured Loan
Surplus
30. 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.
Accounting Cycle
Owner - Capital
Accrual Basis Accounting
Monetary Unit Assumption
31. An expense that changes from period to perio - such as food or gasoline costs.
Mergers
Debtors
Varaiable Expense
Present Value
32. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Temporary Accounts
Cash Basis Accounting
SEC (Securites and Exchange Commision)
Statement of Cash Flows
33. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Annual Financial Statements
Unclassified Balance Sheets
International Financial Reporting Standards
Interim Financial Statements
34. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
Materiality Constraint
Recordkeeping
Events
35. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Bailout
Partnership
Owner Withdrawals
Stock
36. Items paid for in advance of receiving their benefits. Classified as assets.
Stock
Prepaid Expenses
Cash Basis Accounting
Partnership
37. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
T Account
IRA (Individual Retirement Account)
Partnership Agreement
Book Value
38. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Recordkeeping
Intangible assets
Balance Column Account
Risk
39. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Work Sheet
Materiality Constraint
Accrued Expenses
Conceptual Framework
40. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Credit
Work Sheet
Chart of Accounts
Assets
41. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Debtors
Prepaid Expenses
Shares
Bonds
42. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Closing process
Full Disclosure Principle
Liabilities
Adjusting Entry
43. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Working Papers
Trial balance
Closing Entries
Accounting Equation
44. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Income Summary
Materiality Constraint
Current Ratio
Balance Sheet
45. Tool used to show the effects of transactions and events on individual accounts.
Account
Corporation
T Account
Plant Assets
46. 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.
Time Period Assumptions
Federal Reserve System
Unclassified Balance Sheets
Statement of Owner's Equity
47. 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.
Bonds
Current Liabilities
Partnership
Cost-benefit Constraint
48. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
CD (Certificate of Deposit)
Intangible assets
Balance Sheet
Revenues
49. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Current Assets
Temporary Accounts
CD (Certificate of Deposit)
Accounting Equation
50. 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
Creditors
NASDAQ
Interim Financial Statements
Reversing Entries