Test your basic knowledge |

DSST Principles Of Finance

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. 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.






2. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.






3. Individuals or organizations that owe money.






4. 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.






5. A legal entity that is seperate from its owners.






6. 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.






7. Goals that are specific - measurable - attainable - realistic - and time bound.






8. Loaning or giving money to a business in orer to save it from bankruptcy.






9. An expense that changes from period to perio - such as food or gasoline costs.






10. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.






11. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.






12. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.






13. The principle prescribing that revenue is recognized when earned.






14. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.






15. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.






16. Accounting information is based on cost with potential subsequent adjustments to fair value.






17. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.






18. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.






19. Gross increase in equity from a company's business activities that earn income.






20. Business owned by a single person.






21. Business owned by two or more people.






22. Outflows or using up of assets as part of operations of business to generate sales.






23. 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.






24. 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.






25. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.






26. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.






27. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.






28. Persons using accounting information who are directly involved in managing the organization.






29. 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.






30. 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.






31. Excess of expenses over revenues for a period.






32. Income from investments - including dividends - interest - or the sale of a property.






33. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.






34. A loan that is backed by collateral such as cars - houses - or other assets.






35. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.






36. Rules that specify acceptable accounting practices.






37. All purpose journal for recording the debits and credits of transactions and events.






38. 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.






39. Entries recorded at the end of each accounting period to transfer end of period balances in revenue - gain - expense - loss - and withdrawal (dividend for a corporation) accounts to the capital account (to retain earnings for a corporation).






40. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.






41. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.






42. Process of transferring journal entry information to the ledger; computerized systems automate this process.






43. 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.






44. Assets put into the business by the owner.






45. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.






46. Uncertainty about expected return.






47. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.






48. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.






49. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.






50. 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