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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 act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Monetary Unit Assumption
Mergers
Acquisition
Money Market Account
2. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Creditors
Securities
Profit Margin
Stock
3. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Risk Tolerance
Sole Proprietorship
Work Sheet
Account
4. Principle that assumes transactions and events can be expressed in money units.
Temporary Accounts
Unearned Revenue
Monetary Unit Assumption
Shares
5. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Financial Accounting Standards Board
Measurement Principle
Cash Basis Accounting
Time Period Assumptions
6. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Debtors
Chart of Accounts
Annual Financial Statements
Working Papers
7. 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.
External Users
Events
Income Statement
Owner - Capital
8. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Unclassified Balance Sheets
General Journal
Posting
Sole Propietorship
9. Area of accounting aimed mainly at serving external users.
Accounting
Revenues
Financial Accounting
Return
10. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Statement of Owner's Equity
Managerial Accounting
Debit
Materiality Constraint
11. 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.
Credit
Journalizing
Accrued Revenues
Equity
12. List of accounts used by a company' includes and identification number for each account.
IPO
Journalizing
CD (Certificate of Deposit)
Chart of Accounts
13. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Return on Assets
Managerial Accounting
Shares
Acquisition
14. 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.
Federal Reserve System
Cost-benefit Constraint
Chart of Accounts
Trial balance
15. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Adjusted Trial Balance
Accrued Expenses
Fixed Expense
Adjusting Entry
16. 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.
Financial Accounting Standards Board
Equity
Securities
IPO
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
Current Liabilities
Account
Preferred Stock
External Transactions
18. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
CD (Certificate of Deposit)
Accrued Expenses
Events
Accounting
19. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Bookkeeping
Conceptual Framework
Liabilities
Partnership Agreement
20. Report of changes in equity over a period; adjusted for increases and for decreases.
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21. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Accounting
Portfolio Income
Liabilities
Contra Account
22. Outflows or using up of assets as part of operations of business to generate sales.
Measurement Principle
Balance Sheet
Expenses
Corporation
23. Persons using accounting information who are not directly involved in running the organization.
NASDAQ
Partnership
External Users
CD (Certificate of Deposit)
24. Difference between total debits and total credits (including the beginning balance) for an account.
Current Liabilities
Account Balance
Adjusted Trial Balance
Corporations
25. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Account Balance
Ledger
Book Value
Post Closing Trial Balance
26. 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
Matching Principle
Managerial Accounting
Reversing Entries
NASDAQ
27. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Balance Sheet
Matching Principle (or Expense Recognition Principle)
Statement of Cash Flows
Accrued Revenues
28. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Profit Margin
Cost-benefit Constraint
Journal
Sarbanes-Oxley Act (SOX)
29. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accounting Period
Accounting
Income Summary
Audit
30. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Annual Financial Statements
Account Balance
Corporation
SEC (Securites and Exchange Commision)
31. Individuals or organizations that owe money.
Adjusted Trial Balance
Portfolio Income
Working Papers
Debtors
32. 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.
Temporary Accounts
Net Income
Reversing Entries
Operating Cycle
33. Excess of expenses over revenues for a period.
Partnership Agreement
Posting Reference Column
Equity
Net Loss
34. Individuals or organizations entitled to receive payments
Limited Liability Corporation
Time Period Assumptions
Account
Creditors
35. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Assets
General Journal
Going-concern Assumptions
Matching Principle (or Expense Recognition Principle)
36. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Prepaid Expenses
SEC (Securites and Exchange Commision)
Balance Sheet
Stock
37. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Unearned Revenues
SEC (Securites and Exchange Commision)
Stock
Creditors
38. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Revenues
Conceptual Framework
Limited Liability Corporation
Equity
39. Record containing all accounts (with amounts) for a business.
Ledger
Managerial Accounting
Assets
Internal transactions
40. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Time Period Assumptions
Current Ratio
CD (Certificate of Deposit)
Limited Liability Corporation
41. Goals that are specific - measurable - attainable - realistic - and time bound.
Partnership Agreement
Auditors
Audit
SMART Goal
42. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Time Period Assumptions
Secured Loan
Assets
Owner - Capital
43. 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.
Long Term Investments
Accounting
Measurement Principle
Matching Principle
44. Income from investments - including dividends - interest - or the sale of a property.
Credit
Portfolio Income
Common Stock
Unearned Revenues
45. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Credit
Income Summary
SMART Goal
Balance Column Account
46. Journal entries that affect at least three accounts.
CD (Certificate of Deposit)
Compound Journal Entries
Return
Journalizing
47. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Securities
Owner Withdrawals
Shareholders
Risk Tolerance
48. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Materiality Constraint
Going-concern Assumptions
Conceptual Framework
Auditors
49. 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).
Unadjusted Trial Balance
Common Stock
Closing Entries
Business Entity Assumption
50. A tax deferred account that allows individuals to plan for their retirement.
Ponzi Scheme
Temporary Accounts
Debtors
IRA (Individual Retirement Account)