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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. 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.
Interim Financial Statements
Accounting Cycle
Expense Recognition Principle
Surplus
2. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Risk Tolerance
Materiality Constraint
Financial Accounting
Adjusting Entry
3. Excess of expenses over revenues for a period.
Conceptual Framework
Financial Accounting Standards Board
Risk
Net Loss
4. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Debit
Full Disclosure Principle
Time Period Assumptions
Expanded Accounting Equation
5. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
NYSE (New York Stock Exchange)
Debt Ratio
Return on Assets
Return
6. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Source Documents
Long Term Liabilities
Internal transactions
Adjusted Trial Balance
7. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Working Papers
Common Stock
Journalizing
Posting Reference Column
8. A legal entity that is seperate from its owners.
Corporations
Ledger
Straight-line Depreciation Method
Mergers
9. Monies (or sums of money) received from an investment; often in percent form.
Creditors
Return
Managerial Accounting
Ethics
10. The first time a company sells shares of its stock to the public.
Partnership Agreement
Common Stock
Mergers
IPO
11. Journal entry at the end of an accounting period to bring an asset or liability account to its proper amount and update the related expenses or revenue account.
Limited Liability Corporation
Trial balance
Prepaid Expenses
Adjusting Entry
12. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Owner - Capital
Liabilities
Account
Matching Principle (or Expense Recognition Principle)
13. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Net Income
Credit
Risk Tolerance
Statement of Owner's Equity
14. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Current Liabilities
Interim Financial Statements
IPO
Business Entity Assumption
15. 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.
Limited Liability Corporation
Bonds
Partnership
Classified Balance Sheet
16. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Debtors
Ethics
Recordkeeping
Generally Accepted Accounting Principles
17. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Statement of Owner's Equity
Partnership
IPO
Materiality Constraint
18. The principle prescribing that revenue is recognized when earned.
Fiscal Year
Ledger
Revenue Recognition Principle
Securities
19. Income from investments - including dividends - interest - or the sale of a property.
Acquisition
Portfolio Income
SMART Goal
External Users
20. 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.
Going-concern Assumptions
Liabilities
Prepaid Expenses
Common Stock
21. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Post Closing Trial Balance
CD (Certificate of Deposit)
Current Liabilities
Unclassified Balance Sheets
22. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Unearned Revenue
Natural Business Years
Bookkeeping
Operating Cycle
23. All purpose journal for recording the debits and credits of transactions and events.
Preferred Stock
General Journal
Intangible assets
Internal users
24. Outflows or using up of assets as part of operations of business to generate sales.
Financial Accounting Standards Board
Expenses
Journalizing
Compound Journal Entries
25. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Debt Ratio
Working Papers
Trial balance
Return
26. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Intangible assets
Audit
Long Term Investments
Financial Accounting Standards Board
27. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Time Period Assumptions
Securities
Work Sheet
28. 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
Contra Account
Deficit
Securities and Exchange Commission
29. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Secured Loan
Journal
Current Ratio
Long Term Liabilities
30. Goals that are specific - measurable - attainable - realistic - and time bound.
Posting
Account Balance
Work Sheet
SMART Goal
31. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Equity
Debit
Monetary Unit Assumption
Internal transactions
32. Activities within an organization that can affect the accounting equation.
Expense Recognition Principle
Matching Principle
Internal transactions
Classified Balance Sheet
33. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Return on Assets
Closing Entries
Risk
Accounting
34. Individuals hired to review financial reports and information systems of organizations.
Common Stock
Accrual Basis Accounting
Auditors
Internal users
35. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Annual Financial Statements
Matching Principle
Double Entry Accounting
Compound Journal Entries
36. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Going-concern Assumptions
Income Statement
Unclassified Balance Sheets
Accrued Expenses
37. 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).
Closing Entries
Common Stock
Return on Assets
Acquisition
38. 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.
NYSE (New York Stock Exchange)
Secured Loan
Double Entry Accounting
SEC (Securites and Exchange Commision)
39. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Internal transactions
Financial Accounting
Securities and Exchange Commission
Net Income
40. Income that is available after all of the essential financial commitments have been paid.
Shareholders
Partnership
Discretionary Income
Time Period Assumptions
41. Owners of a corporation who usually receive dividends. Also called shareholders.
Matching Principle (or Expense Recognition Principle)
Stockholders
Accounting Period
Acquisition
42. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Income Summary
NASDAQ
Statement of Cash Flows
Ethics
43. Process of recording transactions in a journal.
Balance Column Account
Bonds
Double Entry Accounting
Journalizing
44. Assets = Liabilities + Equity; Equity equals [Owner capital - owner withdrawal + revenue - expenses] for a non-corporation; Equity equals [Contributed capital - retained earnings + revenue - expenses] for a corporation where dividends are subtracted
Expanded Accounting Equation
Credit
Ethics
Revenue Recognition Principle
45. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Posting Reference Column
Balance Column Account
International Financial Reporting Standards
Federal Reserve System
46. Difference between total debits and total credits (including the beginning balance) for an account.
Measurement Principle
Unearned Revenues
Account Balance
Temporary Accounts
47. Statements that show the effect of proposed transactions and events as if they had occurred.
Operating Cycle
Risk Tolerance
Pro Forma Financial Statement
Corporation
48. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Money Market Account
Full Disclosure Principle
Discretionary Income
Time Period Assumptions
49. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Accrual Basis Accounting
CD (Certificate of Deposit)
Compound Journal Entries
50. Assets pulled out of the business by the owner.
Securities
Book Value
Credit
Owner Withdrawals