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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. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Unadjusted Trial Balance
Closing process
Accounting
Net Loss
2. Owners of a corporation who usually receive dividends. Also called shareholders.
Stockholders
Statement of Cash Flows
Sarbanes-Oxley Act (SOX)
Statement of Owner's Equity
3. 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.
Expense Recognition Principle
Matching Principle
Statement of Cash Flows
Limited Liability Corporation
4. Income from investments - including dividends - interest - or the sale of a property.
Time Period Assumptions
Portfolio Income
Owner - Capital
Sarbanes-Oxley Act (SOX)
5. A corporation's basic ownership share.
Cash Basis Accounting
Common Stock
Managerial Accounting
Financial Accounting
6. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Limited Liability Corporation
Natural Business Years
Closing Entries
Unclassified Balance Sheets
7. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Sole Proprietorship
Revenues
Preferred Stock
Cost Principle
8. 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.
Fixed Expense
Net Loss
NYSE (New York Stock Exchange)
Risk
9. 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.
Owner Investment
Owner - Capital
Accounting Cycle
Annual Financial Statements
10. Goals that are specific - measurable - attainable - realistic - and time bound.
Unadjusted Trial Balance
Bailout
Book Value
SMART Goal
11. Tool used to show the effects of transactions and events on individual accounts.
T Account
Income Summary
Debtors
Partnership
12. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Acquisition
Trial balance
Long Term Liabilities
Journal
13. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Current Ratio
Current Liabilities
Measurement Principle
Matching Principle
14. 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.
Ledger
Adjusting Entry
Monetary Unit Assumption
SEC (Securites and Exchange Commision)
15. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Accounting Equation
Posting
Current Liabilities
Sarbanes-Oxley Act (SOX)
16. 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).
Balance Column Account
Expense Recognition Principle
T Account
Income Summary
17. A security representing partial ownership of the company. It gives the holer priority to dividends over common stock investors. Capital stock that provides a specific dividend - which is paid before any dividends are pai to common stock holders - an
Cost Principle
Journal
Balance Sheet
Preferred Stock
18. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Securities and Exchange Commission
Common Stock
Post Closing Trial Balance
Revenues
19. Principle that assumes transactions and events can be expressed in money units.
Natural Business Years
Owner - Capital
Monetary Unit Assumption
Financial Accounting
20. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Deficit
Long Term Investments
Accrual Basis Accounting
Return
21. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Bookkeeping
Trial balance
Sole Proprietorship
Account
22. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Corporation
Accrued Expenses
Credit
Net Loss
23. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Trial balance
Going-concern Assumptions
Ethical Dilemma
Financial Accounting
24. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Long Term Liabilities
Permanent Accounts
Partnership
Debt Ratio
25. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Journalizing
Posting
Partnership
Unearned Revenues
26. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Accrued Revenues
Varaiable Expense
Money Market Account
Balance Column Account
27. Happenings that both affect an organization's financial position and can be reliably measured.
Events
Internal users
Securities
External Users
28. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Permanent Accounts
Creditors
Closing Entries
SEC (Securites and Exchange Commision)
29. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Cash Basis Accounting
Time Period Assumptions
Book Value
Conceptual Framework
30. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Matching Principle
Passive Income
Unearned Revenue
Journalizing
31. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Unclassified Balance Sheets
Return
Working Papers
Current Liabilities
32. Rules that specify acceptable accounting practices.
Post Closing Trial Balance
Generally Accepted Accounting Principles
Fixed Expense
Current Ratio
33. Uncertainty about expected return.
Risk
Credit
Debit
Financial Accounting
34. 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.
Corporation
Reversing Entries
Full Disclosure Principle
Internal transactions
35. List of accounts used by a company' includes and identification number for each account.
Chart of Accounts
Statement of Owner's Equity
Classified Balance Sheet
Cash Basis Accounting
36. Loaning or giving money to a business in orer to save it from bankruptcy.
Chart of Accounts
Income Statement
Creditors
Bailout
37. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern Assumptions
Current Liabilities
Temporary Accounts
Secured Loan
38. Monies (or sums of money) received from an investment; often in percent form.
Debt Ratio
Depreciation
Events
Return
39. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Debt Ratio
Accounting Cycle
Net Income
Long Term Investments
40. Individuals hired to review financial reports and information systems of organizations.
Auditors
Sarbanes-Oxley Act (SOX)
Balance Column Account
Mergers
41. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Account
Net Loss
Journal
Business Entity Assumption
42. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Recordkeeping
Matching Principle (or Expense Recognition Principle)
Surplus
Net Loss
43. The twelve month period that ends when a company's sales activities are at their lowest point.
Natural Business Years
Temporary Accounts
Contra Account
Assets
44. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Partnership Agreement
Present Value
Internal transactions
Expenses
45. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Working Papers
Business Entity Assumption
Unearned Revenue
Intangible assets
46. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Classified Balance Sheet
Depreciation
Limited Liability Corporation
Auditors
47. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Measurement Principle
Work Sheet
Accounting
Post Closing Trial Balance
48. The value of a future cash steam discounted at the appropriate market interest rate.
Long Term Liabilities
Auditors
Present Value
Fiscal Year
49. Outflows or using up of assets as part of operations of business to generate sales.
Natural Business Years
Measurement Principle
Expenses
Auditors
50. A tax deferred account that allows individuals to plan for their retirement.
Measurement Principle
Balance Sheet
IRA (Individual Retirement Account)
Expanded Accounting Equation