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DSST Principles Of Finance

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. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.






2. Assets = Liabilities + Equity; Equity equals [Owner capital - owner withdrawal + revenue - expenses] for a non-corporation; Equity equals [Contributed capital - retained earnings + revenue - expenses] for a corporation where dividends are subtracted






3. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.






4. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.






5. The principle prescribing that revenue is recognized when earned.






6. A loan that is backed by collateral such as cars - houses - or other assets.






7. Area of accounting aimed mainly at serving the decision-making needs of internal users.






8. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.






9. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.






10. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.






11. Independent group of full-time members responsible for setting accounting rules.






12. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.






13. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.






14. Balance sheet that broadly groups assets - liabilities - and equity accounts.






15. 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.






16. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.






17. Amount earned after subtracting all expenses necessary for and matched with sales for a period.






18. Process of recording transactions in a journal.






19. 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.






20. An expense that changes from period to perio - such as food or gasoline costs.






21. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.






22. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.






23. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.






24. 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






25. Business owned by one person that is not organized as a corporation.






26. Business owned by two or more people.






27. Expenses that remain the same regardless of the circumstances.






28. Process of transferring journal entry information to the ledger; computerized systems automate this process.






29. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.






30. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).






31. 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.






32. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.






33. Activities within an organization that can affect the accounting equation.






34. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.






35. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.






36. Obligations not due to be paid within one year or the operating cycle - whichever is longer.






37. 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.






38. Persons using accounting information who are directly involved in managing the organization.






39. Principle that assumes transactions and events can be expressed in money units.






40. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.






41. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.






42. Owners of a corporation who usually receive dividends. Also called shareholders.






43. 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.






44. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.






45. Individuals or organizations that owe money.






46. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.






47. Uncertainty about expected return.






48. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.






49. The combining of two or more comapnies into one larger company.






50. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.