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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. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Sole Propietorship
Temporary Accounts
Cost-benefit Constraint
Return on Assets
2. The first time a company sells shares of its stock to the public.
Statement of Cash Flows
Owner - Capital
IPO
Straight-line Depreciation Method
3. Process of recording transactions in a journal.
Acquisition
Accounting Period
Journalizing
Monetary Unit Assumption
4. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Journalizing
Fiscal Year
Credit
Accounting Equation
5. List of accounts and balances prepared after period-end adjustments are recorded and posted.
External Users
Adjusted Trial Balance
Securities
Straight-line Depreciation Method
6. Individuals or organizations entitled to receive payments
Materiality Constraint
Creditors
Credit
Owner - Capital
7. 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
External Users
Limited Liability Corporation
Depreciation
8. The principle prescribing that revenue is recognized when earned.
Net Loss
Statement of Cash Flows
Work Sheet
Revenue Recognition Principle
9. Expenses that remain the same regardless of the circumstances.
External Transactions
Fixed Expense
Current Ratio
Secured Loan
10. Happenings that both affect an organization's financial position and can be reliably measured.
Depreciation
Shareholders
Accrued Revenues
Events
11. Items paid for in advance of receiving their benefits. Classified as assets.
NASDAQ
Equity
Prepaid Expenses
Long Term Investments
12. Accounting information is based on cost with potential subsequent adjustments to fair value.
Income Summary
Ledger
Measurement Principle
Shareholders
13. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Adjusted Trial Balance
Securities and Exchange Commission
Temporary Accounts
Debit
14. An expense that changes from period to perio - such as food or gasoline costs.
Varaiable Expense
Business Entity Assumption
Federal Reserve System
Common Stock
15. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Ledger
Owner Withdrawals
Money Market Account
Straight-line Depreciation Method
16. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Classified Balance Sheet
Account Balance
SEC (Securites and Exchange Commision)
Bookkeeping
17. A legal entity that is seperate from its owners.
Corporations
Stockholders
Debt Ratio
Accounting
18. Report of changes in equity over a period; adjusted for increases and for decreases.
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19. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Securities
Source Documents
Common Stock
Shares
20. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Posting
Matching Principle (or Expense Recognition Principle)
Stockholders
Temporary Accounts
21. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Passive Income
NASDAQ
Discretionary Income
Working Papers
22. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Accounting Cycle
Trial balance
Posting
Accounting
23. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Revenue Recognition Principle
Classified Balance Sheet
Journal
Conceptual Framework
24. 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
Ethics
Preferred Stock
Securities and Exchange Commission
Sarbanes-Oxley Act (SOX)
25. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Intangible assets
Unearned Revenues
Closing Entries
Partnership
26. 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).
Going-concern Assumptions
Closing Entries
Statement of Owner's Equity
Current Ratio
27. A corporation's basic ownership share.
Common Stock
Internal users
Risk
Expense Recognition Principle
28. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
NASDAQ
Trial balance
Shareholders
Shares
29. Difference between total debits and total credits (including the beginning balance) for an account.
Accrued Expenses
Account Balance
Corporations
Sarbanes-Oxley Act (SOX)
30. Excess of expenses over revenues for a period.
Preferred Stock
Risk Tolerance
Net Loss
Compound Journal Entries
31. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
External Transactions
Unearned Revenues
Expenses
Account Balance
32. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Sole Proprietorship
Corporations
Long Term Investments
Working Papers
33. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Internal users
Sole Proprietorship
CD (Certificate of Deposit)
Accounting Cycle
34. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
IPO
Net Income
Permanent Accounts
Accounting
35. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
International Accounting Standards Board
Internal users
Debtors
Limited Liability Corporation
36. 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.
Creditors
Ponzi Scheme
Adjusting Entry
IPO
37. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Straight-line Depreciation Method
Ethical Dilemma
Stock
Journal
38. Gross increase in equity from a company's business activities that earn income.
Ledger
Revenues
Prepaid Expenses
Accrual Basis Accounting
39. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Corporation
Measurement Principle
Ponzi Scheme
Working Papers
40. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
External Users
Auditors
IRA (Individual Retirement Account)
Unearned Revenue
41. Rules that specify acceptable accounting practices.
International Accounting Standards Board
Current Ratio
Generally Accepted Accounting Principles
Intangible assets
42. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Business Entity Assumption
Compound Journal Entries
Audit
Shareholders
43. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Internal users
NYSE (New York Stock Exchange)
Accounting Equation
Revenue Recognition Principle
44. Area of accounting aimed mainly at serving external users.
Time Period Assumptions
Unearned Revenues
Financial Accounting
General Journal
45. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
SEC (Securites and Exchange Commision)
Long Term Investments
Permanent Accounts
46. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Matching Principle
Income Statement
Long Term Liabilities
Operating Cycle
47. The twelve month period that ends when a company's sales activities are at their lowest point.
Sole Propietorship
Natural Business Years
Accrued Revenues
Net Loss
48. Income from investments - including dividends - interest - or the sale of a property.
Partnership
Audit
Business Entity Assumption
Portfolio Income
49. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Audit
Long Term Liabilities
Recordkeeping
Mergers
50. Principle that assumes transactions and events can be expressed in money units.
NYSE (New York Stock Exchange)
Sarbanes-Oxley Act (SOX)
Monetary Unit Assumption
Expense Recognition Principle