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Test your basic knowledge |
DSST Principles Of Finance
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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. 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.
Money Market Account
Mergers
Ponzi Scheme
Net Loss
2. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Trial balance
Profit Margin
Corporations
Federal Reserve System
3. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Money Market Account
Return on Assets
Credit
IPO
4. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Measurement Principle
Owner - Capital
Interim Financial Statements
Acquisition
5. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Debtors
Balance Sheet
Deficit
Corporations
6. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Cost-benefit Constraint
Compound Journal Entries
Interim Financial Statements
Adjusted Trial Balance
7. Items paid for in advance of receiving their benefits. Classified as assets.
Prepaid Expenses
Intangible assets
Statement of Owner's Equity
Natural Business Years
8. Excess of expenses over revenues for a period.
Equity
Net Loss
Classified Balance Sheet
Ethics
9. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Income Summary
Cash Basis Accounting
Accrued Expenses
Journalizing
10. Gross increase in equity from a company's business activities that earn income.
Accounting
NYSE (New York Stock Exchange)
Revenues
Limited Liability Corporation
11. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Posting
Account
Corporation
Securities and Exchange Commission
12. 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
Stock
NASDAQ
Return on Assets
Discretionary Income
13. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Income Statement
Owner Investment
Classified Balance Sheet
International Accounting Standards Board
14. Persons using accounting information who are directly involved in managing the organization.
Risk Tolerance
Revenue Recognition Principle
Internal users
Account Balance
15. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Risk Tolerance
Current Ratio
Income Statement
Accrual Basis Accounting
16. The money left over when income exceeds expenditure.
Unsecured Loan
Surplus
Events
Return on Assets
17. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Full Disclosure Principle
Unearned Revenue
Acquisition
NASDAQ
18. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Long Term Liabilities
Generally Accepted Accounting Principles
Time Period Assumptions
Ledger
19. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Ethical Dilemma
Mergers
Auditors
Owner Investment
20. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Posting
Audit
Contra Account
Account Balance
21. Statements that show the effect of proposed transactions and events as if they had occurred.
Pro Forma Financial Statement
Audit
International Financial Reporting Standards
Stockholders
22. Outflows or using up of assets as part of operations of business to generate sales.
Events
Money Market Account
Expenses
Generally Accepted Accounting Principles
23. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Fiscal Year
Book Value
Owner Investment
Posting Reference Column
24. 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.
Owner Withdrawals
Passive Income
Federal Reserve System
Balance Column Account
25. 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.
Going-concern Assumptions
International Financial Reporting Standards
Ponzi Scheme
Expanded Accounting Equation
26. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Bonds
Creditors
Matching Principle (or Expense Recognition Principle)
Unadjusted Trial Balance
27. List of accounts used by a company' includes and identification number for each account.
International Accounting Standards Board
Chart of Accounts
Cost-benefit Constraint
Debtors
28. Uncertainty about expected return.
Measurement Principle
Depreciation
SEC (Securites and Exchange Commision)
Risk
29. Rules that specify acceptable accounting practices.
Monetary Unit Assumption
Unclassified Balance Sheets
Generally Accepted Accounting Principles
Cost-benefit Constraint
30. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Prepaid Expenses
Working Papers
Income Summary
Corporation
31. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
NYSE (New York Stock Exchange)
Unearned Revenue
Expense Recognition Principle
Shares
32. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
SEC (Securites and Exchange Commision)
Unearned Revenues
Business Entity Assumption
Materiality Constraint
33. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Cash Basis Accounting
Adjusted Trial Balance
Common Stock
Varaiable Expense
34. Income from investments - including dividends - interest - or the sale of a property.
Portfolio Income
Secured Loan
Conceptual Framework
T Account
35. 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.
Fiscal Year
Adjusting Entry
External Users
Mergers
36. The value of a future cash steam discounted at the appropriate market interest rate.
International Financial Reporting Standards
Present Value
Closing Entries
Current Assets
37. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Reversing Entries
Bookkeeping
Accounting
Partnership Agreement
38. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Recordkeeping
CD (Certificate of Deposit)
Corporations
Assets
39. Assets put into the business by the owner.
Owner Investment
Income Summary
Recordkeeping
Internal users
40. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Book Value
Corporations
Events
Time Period Assumptions
41. 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.
Matching Principle (or Expense Recognition Principle)
Risk
Owner - Capital
NYSE (New York Stock Exchange)
42. Loaning or giving money to a business in orer to save it from bankruptcy.
Time Period Assumptions
Equity
Corporations
Bailout
43. Process of recording transactions in a journal.
Accounting Cycle
Journalizing
IRA (Individual Retirement Account)
Trial balance
44. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Limited Liability Corporation
Current Ratio
Deficit
Closing process
45. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Source Documents
Compound Journal Entries
Unclassified Balance Sheets
Internal transactions
46. Individuals or organizations entitled to receive payments
Creditors
Ledger
Expense Recognition Principle
Sole Proprietorship
47. 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).
Financial Accounting Standards Board
Closing Entries
Long Term Liabilities
Time Period Assumptions
48. Business owned by two or more people.
Partnership
Preferred Stock
Accounting Cycle
SMART Goal
49. 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.
Creditors
Post Closing Trial Balance
Long Term Liabilities
Accrued Revenues
50. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Income Summary
Debt Ratio
Cost-benefit Constraint
Bookkeeping