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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. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Debit
Shares
Current Liabilities
Account
2. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Cash Basis Accounting
Partnership
Time Period Assumptions
Pro Forma Financial Statement
3. A legal entity that is seperate from its owners.
External Users
Corporations
Shares
Preferred Stock
4. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Generally Accepted Accounting Principles
Return
Owner Investment
Plant Assets
5. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Unsecured Loan
Ethical Dilemma
Limited Liability Corporation
Risk Tolerance
6. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Risk
Statement of Owner's Equity
Unearned Revenues
Return
7. 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
Unadjusted Trial Balance
IRA (Individual Retirement Account)
8. A tax deferred account that allows individuals to plan for their retirement.
Accounting
Cost Principle
Pro Forma Financial Statement
IRA (Individual Retirement Account)
9. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
CD (Certificate of Deposit)
Trial balance
Common Stock
Stockholders
10. 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.
Accrued Revenues
Ledger
Preferred Stock
Unclassified Balance Sheets
11. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Shares
Ethics
Natural Business Years
Current Ratio
12. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Sole Propietorship
Bailout
Portfolio Income
Closing process
13. 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.
Journal
Time Period Assumptions
Money Market Account
Income Statement
14. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Money Market Account
Fixed Expense
Statement of Owner's Equity
Ethical Dilemma
15. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
IPO
Statement of Owner's Equity
Preferred Stock
Partnership
16. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Ethics
Account
Preferred Stock
Time Period Assumptions
17. The combining of two or more comapnies into one larger company.
Mergers
Audit
Stock
Operating Cycle
18. Loaning or giving money to a business in orer to save it from bankruptcy.
Depreciation
Bailout
Common Stock
Working Papers
19. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Bookkeeping
Chart of Accounts
Interim Financial Statements
Journalizing
20. Length of time covered by financial statements; also called reporting period.
Journalizing
Accounting Period
Portfolio Income
Bailout
21. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Debtors
Corporation
Generally Accepted Accounting Principles
Source Documents
22. 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.
Generally Accepted Accounting Principles
External Users
Adjusting Entry
Partnership Agreement
23. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Partnership
Time Period Assumptions
Generally Accepted Accounting Principles
Compound Journal Entries
24. 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.
Materiality Constraint
NYSE (New York Stock Exchange)
IPO
Permanent Accounts
25. Expenses that remain the same regardless of the circumstances.
Partnership
Debt Ratio
Fixed Expense
Internal users
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).
Unearned Revenue
Prepaid Expenses
Closing Entries
Debtors
27. All purpose journal for recording the debits and credits of transactions and events.
Shares
External Transactions
General Journal
Plant Assets
28. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Work Sheet
Mergers
Risk
Time Period Assumptions
29. 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.
Expenses
Federal Reserve System
Ponzi Scheme
Corporations
30. 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.
Ponzi Scheme
Internal users
International Financial Reporting Standards
Posting Reference Column
31. Persons using accounting information who are directly involved in managing the organization.
Time Period Assumptions
Straight-line Depreciation Method
Fixed Expense
Internal users
32. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Risk Tolerance
Closing Entries
Adjusted Trial Balance
Account
33. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Unsecured Loan
Temporary Accounts
Account
Managerial Accounting
34. 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.
Bookkeeping
Ethics
Income Summary
Bonds
35. Area of accounting aimed mainly at serving external users.
Debit
Owner Withdrawals
Expenses
Financial Accounting
36. A loan that is backed by collateral such as cars - houses - or other assets.
Matching Principle (or Expense Recognition Principle)
Source Documents
CD (Certificate of Deposit)
Secured Loan
37. 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
Journalizing
NASDAQ
Shareholders
Time Period Assumptions
38. 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.
Expenses
T Account
Owner - Capital
Account Balance
39. Happenings that both affect an organization's financial position and can be reliably measured.
Credit
Events
Compound Journal Entries
Long Term Liabilities
40. List of accounts used by a company' includes and identification number for each account.
Revenue Recognition Principle
Chart of Accounts
Owner Withdrawals
Acquisition
41. Accounting information is based on cost with potential subsequent adjustments to fair value.
Unadjusted Trial Balance
Current Liabilities
Measurement Principle
Accounting Equation
42. Business owned by two or more people.
Temporary Accounts
Expense Recognition Principle
Partnership
Auditors
43. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Unearned Revenues
Securities and Exchange Commission
External Users
Debt Ratio
44. 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.
Sarbanes-Oxley Act (SOX)
Equity
Ethical Dilemma
Long Term Investments
45. Owners of a corporation who usually receive dividends. Also called stockholders.
Shareholders
Closing process
Net Loss
Auditors
46. 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.
Monetary Unit Assumption
Liabilities
Adjusting Entry
Bailout
47. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
External Users
Annual Financial Statements
Profit Margin
Closing Entries
48. The value of a future cash steam discounted at the appropriate market interest rate.
Unadjusted Trial Balance
Present Value
Closing Entries
Classified Balance Sheet
49. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Surplus
Income Statement
Partnership Agreement
Unearned Revenue
50. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Expenses
Compound Journal Entries
Accounting
Common Stock