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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. Length of time covered by financial statements; also called reporting period.






2. Individuals or organizations that owe money.






3. A security representing a share of ownership in a company - providing voting rights - and entitling the holer to a share of the company's success through dividends and/or capital appreciation.






4. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.






5. 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.






6. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.






7. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.






8. Prescribes expenses to be reported in the same period as the revenues that were eared as a result of the expenses. Also called the Matching Principle.






9. Exchanges of economic value between one entity and another entity.






10. Report of changes in equity over a period; adjusted for increases and for decreases.


11. Items paid for in advance of receiving their benefits. Classified as assets.






12. A corporation's basic ownership share.






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






14. The twelve month period that ends when a company's sales activities are at their lowest point.






15. 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.






16. 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.






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






18. List of accounts and balances prepared after period-end adjustments are recorded and posted.






19. Rules that specify acceptable accounting practices.






20. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.






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






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






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






24. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.






25. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.






26. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.






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






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






29. A tax deferred account that allows individuals to plan for their retirement.






30. 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






31. Statements that show the effect of proposed transactions and events as if they had occurred.






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






33. 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.






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






35. Owners of a corporation who usually receive dividends. Also called stockholders.






36. Record containing all accounts (with amounts) for a business.






37. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.






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






39. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)






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






41. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.






42. Gross increase in equity from a company's business activities that earn income.






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






44. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.






45. Debt securities that are issued by a borrower to raise capital . Bonds guarantee payments of the original amount borrowe plus interest and/or repayable on a fixed rate when the bond matures.






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






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






48. Happenings that both affect an organization's financial position and can be reliably measured.






49. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.






50. 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).