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Test your basic knowledge |
DSST Principles Of Finance
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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 right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Assets
Going-concern Assumptions
Credit
Present Value
2. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Source Documents
Secured Loan
Cost Principle
Profit Margin
3. A corporation's basic ownership share.
Pro Forma Financial Statement
Common Stock
Interim Financial Statements
Surplus
4. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Common Stock
Source Documents
Intangible assets
Classified Balance Sheet
5. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Owner Withdrawals
Materiality Constraint
Accounting
Risk
6. Outflows or using up of assets as part of operations of business to generate sales.
Stock
Auditors
Expenses
Debt Ratio
7. All purpose journal for recording the debits and credits of transactions and events.
Securities and Exchange Commission
General Journal
Sole Propietorship
Trial balance
8. 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.
Financial Accounting Standards Board
Reversing Entries
Return
Unadjusted Trial Balance
9. Persons using accounting information who are not directly involved in running the organization.
Going-concern Assumptions
External Users
Securities and Exchange Commission
Journal
10. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Money Market Account
Securities
Monetary Unit Assumption
Interim Financial Statements
11. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Statement of Owner's Equity
Financial Accounting Standards Board
Depreciation
Current Liabilities
12. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Audit
Unadjusted Trial Balance
Current Liabilities
Cost-benefit Constraint
13. 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).
Unsecured Loan
Statement of Cash Flows
Income Summary
IPO
14. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Annual Financial Statements
Chart of Accounts
Closing process
Creditors
15. Items paid for in advance of receiving their benefits. Classified as assets.
Prepaid Expenses
Owner Withdrawals
Shareholders
Ethical Dilemma
16. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
NYSE (New York Stock Exchange)
Accrued Expenses
Audit
Full Disclosure Principle
17. Individuals or organizations that owe money.
Ethical Dilemma
Secured Loan
Partnership Agreement
Debtors
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.
Managerial Accounting
Owner Investment
Events
Owner - Capital
19. Business owned by one person that is not organized as a corporation.
Time Period Assumptions
External Users
Sole Proprietorship
Revenues
20. Income that is available after all of the essential financial commitments have been paid.
Intangible assets
Bookkeeping
Discretionary Income
Interim Financial Statements
21. 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.
Income Statement
Expanded Accounting Equation
Ledger
Credit
22. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Interim Financial Statements
NASDAQ
Income Summary
Owner - Capital
23. Accounting information is based on cost with potential subsequent adjustments to fair value.
Risk Tolerance
Accounting
Measurement Principle
Revenues
24. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Events
Bookkeeping
Closing process
Classified Balance Sheet
25. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
NASDAQ
Intangible assets
Net Loss
Natural Business Years
26. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Current Ratio
Accrued Expenses
Accounting Cycle
Natural Business Years
27. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Credit
Return on Assets
Cost-benefit Constraint
Deficit
28. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Long Term Investments
Net Income
Natural Business Years
Account Balance
29. Create the Public Company Accounting Oversight Board - regulates analyst conflicts - imposes corporate governance requirements - enhances accounting and control disclosures - impacts insider transactions and executive loans - establishes new types of
Journalizing
Statement of Owner's Equity
Sarbanes-Oxley Act (SOX)
Long Term Investments
30. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Financial Accounting
Accounting Period
Sole Proprietorship
Balance Column Account
31. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Assets
Common Stock
Unadjusted Trial Balance
Surplus
32. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Securities and Exchange Commission
Income Statement
Credit
Expenses
33. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Limited Liability Corporation
Statement of Cash Flows
Risk
Preferred Stock
34. Business owned by two or more people.
Assets
Ledger
Partnership
Interim Financial Statements
35. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Sarbanes-Oxley Act (SOX)
Managerial Accounting
Common Stock
Stock
36. Exchanges of economic value between one entity and another entity.
External Transactions
Shares
International Financial Reporting Standards
Materiality Constraint
37. The first time a company sells shares of its stock to the public.
Securities
IPO
Closing Entries
SMART Goal
38. Gross increase in equity from a company's business activities that earn income.
Surplus
Generally Accepted Accounting Principles
Revenues
Conceptual Framework
39. Length of time covered by financial statements; also called reporting period.
Current Liabilities
Net Loss
Accounting Period
Temporary Accounts
40. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Statement of Owner's Equity
Ethical Dilemma
Reversing Entries
Debtors
41. Goals that are specific - measurable - attainable - realistic - and time bound.
IPO
Cost-benefit Constraint
Partnership
SMART Goal
42. Assets pulled out of the business by the owner.
Owner Withdrawals
Profit Margin
SEC (Securites and Exchange Commision)
International Financial Reporting Standards
43. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Risk
Surplus
Ethics
Unearned Revenues
44. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Revenue Recognition Principle
Operating Cycle
Work Sheet
International Financial Reporting Standards
45. 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.
Revenues
NYSE (New York Stock Exchange)
Straight-line Depreciation Method
International Accounting Standards Board
46. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Full Disclosure Principle
Discretionary Income
Partnership
Contra Account
47. 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.
Current Ratio
Current Liabilities
Equity
Time Period Assumptions
48. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Equity
SEC (Securites and Exchange Commision)
Annual Financial Statements
Account
49. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Shares
Source Documents
Corporation
Accounting Period
50. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Common Stock
Auditors
Annual Financial Statements
Post Closing Trial Balance