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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. 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.
Debt Ratio
Federal Reserve System
Expenses
Cost Principle
2. Items paid for in advance of receiving their benefits. Classified as assets.
Owner - Capital
Stockholders
Prepaid Expenses
Stock
3. An expense that changes from period to perio - such as food or gasoline costs.
Measurement Principle
Bailout
Revenues
Varaiable Expense
4. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Temporary Accounts
Matching Principle (or Expense Recognition Principle)
Internal users
Money Market Account
5. The first time a company sells shares of its stock to the public.
Accrued Revenues
Passive Income
SMART Goal
IPO
6. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Statement of Owner's Equity
Journal
Matching Principle
Operating Cycle
7. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Matching Principle
Unearned Revenue
Liabilities
Owner - Capital
8. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Unclassified Balance Sheets
Recordkeeping
Annual Financial Statements
Income Summary
9. 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.
Return on Assets
Sole Proprietorship
Long Term Liabilities
Liabilities
10. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Events
SEC (Securites and Exchange Commision)
Owner Withdrawals
Fixed Expense
11. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
CD (Certificate of Deposit)
Ponzi Scheme
Chart of Accounts
Bookkeeping
12. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Going-concern Assumptions
Materiality Constraint
Internal users
Full Disclosure Principle
13. 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.
General Journal
Varaiable Expense
Unclassified Balance Sheets
Equity
14. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Time Period Assumptions
Balance Sheet
Discretionary Income
Partnership Agreement
15. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Source Documents
Time Period Assumptions
Money Market Account
Creditors
16. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Debtors
Business Entity Assumption
Corporation
Income Statement
17. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Debt Ratio
Recordkeeping
Closing process
Long Term Investments
18. 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.
Shares
Federal Reserve System
Owner - Capital
Debtors
19. Monies (or sums of money) received from an investment; often in percent form.
Return
Deficit
Measurement Principle
Accounting Equation
20. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Working Papers
Common Stock
Shares
Portfolio Income
21. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Sole Proprietorship
Stockholders
Statement of Cash Flows
Account
22. Record containing all accounts (with amounts) for a business.
Time Period Assumptions
Risk
Ledger
Stockholders
23. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
IRA (Individual Retirement Account)
Preferred Stock
International Accounting Standards Board
24. Income from investments - including dividends - interest - or the sale of a property.
Stockholders
Net Loss
Preferred Stock
Portfolio Income
25. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Surplus
NYSE (New York Stock Exchange)
Cost Principle
Deficit
26. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Owner Investment
Deficit
Book Value
Statement of Cash Flows
27. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Accrued Revenues
Ledger
Accrued Expenses
Corporation
28. The combining of two or more comapnies into one larger company.
Classified Balance Sheet
Straight-line Depreciation Method
Permanent Accounts
Mergers
29. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Trial balance
Owner - Capital
Creditors
Debit
30. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Common Stock
IPO
Trial balance
Deficit
31. Activities within an organization that can affect the accounting equation.
Internal transactions
Trial balance
Conceptual Framework
Risk Tolerance
32. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
International Accounting Standards Board
Depreciation
Classified Balance Sheet
Materiality Constraint
33. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Owner Investment
Unclassified Balance Sheets
Partnership Agreement
Adjusted Trial Balance
34. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Unclassified Balance Sheets
Long Term Liabilities
Materiality Constraint
Going-concern Assumptions
35. The principle prescribing that revenue is recognized when earned.
Fixed Expense
Events
Current Assets
Revenue Recognition Principle
36. 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
Account
Accrued Revenues
Net Income
37. Persons using accounting information who are directly involved in managing the organization.
Statement of Owner's Equity
International Financial Reporting Standards
Internal users
Deficit
38. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Post Closing Trial Balance
Partnership Agreement
Cash Basis Accounting
Posting Reference Column
39. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Owner Withdrawals
Materiality Constraint
Expenses
Going-concern Assumptions
40. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Profit Margin
Posting
Internal transactions
Debt Ratio
41. Rules that specify acceptable accounting practices.
Generally Accepted Accounting Principles
Adjusting Entry
Reversing Entries
Post Closing Trial Balance
42. 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.
Annual Financial Statements
International Financial Reporting Standards
Bailout
Time Period Assumptions
43. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Accounting Equation
Secured Loan
Assets
Financial Accounting Standards Board
44. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Full Disclosure Principle
Unearned Revenues
Common Stock
IPO
45. Accounting information is based on cost with potential subsequent adjustments to fair value.
Ledger
Measurement Principle
Financial Accounting Standards Board
Audit
46. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Passive Income
Balance Column Account
Return on Assets
Current Assets
47. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
Return
Matching Principle
Classified Balance Sheet
48. 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.
Risk Tolerance
Financial Accounting
Adjusting Entry
Long Term Liabilities
49. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Credit
Partnership
Expanded Accounting Equation
IPO
50. Business owned by a single person.
Profit Margin
Sole Propietorship
Depreciation
Cash Basis Accounting