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DSST Principles Of Finance
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Subjects
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dsst
,
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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study here
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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. 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.
Shares
T Account
Fixed Expense
Matching Principle
2. 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.
Owner - Capital
Corporations
Going-concern Assumptions
Accrued Revenues
3. 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.
CD (Certificate of Deposit)
Equity
Bookkeeping
Bonds
4. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Classified Balance Sheet
Annual Financial Statements
Income Summary
Statement of Cash Flows
5. Excess of expenses over revenues for a period.
Net Loss
Expanded Accounting Equation
Account
Unsecured Loan
6. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Full Disclosure Principle
Accrued Expenses
Accounting
Natural Business Years
7. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Accounting Equation
Conceptual Framework
Matching Principle (or Expense Recognition Principle)
Sole Proprietorship
8. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Federal Reserve System
Journalizing
Deficit
Debit
9. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Closing process
Risk Tolerance
Surplus
Auditors
10. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Debt Ratio
Assets
Working Papers
Adjusting Entry
11. Area of accounting aimed mainly at serving external users.
Financial Accounting
Working Papers
Accounting Equation
Accrued Revenues
12. Income from investments - including dividends - interest - or the sale of a property.
Portfolio Income
Unsecured Loan
Reversing Entries
Expanded Accounting Equation
13. Length of time covered by financial statements; also called reporting period.
Accounting Period
Securities and Exchange Commission
Prepaid Expenses
Return
14. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Bailout
Journalizing
SEC (Securites and Exchange Commision)
Owner Withdrawals
15. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Journalizing
Time Period Assumptions
Permanent Accounts
Accrued Expenses
16. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
CD (Certificate of Deposit)
Time Period Assumptions
Mergers
Creditors
17. 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.
Closing process
Expenses
Common Stock
Time Period Assumptions
18. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Current Ratio
Cost-benefit Constraint
Business Entity Assumption
External Transactions
19. 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.
Shares
Expense Recognition Principle
Pro Forma Financial Statement
Portfolio Income
20. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Time Period Assumptions
Partnership Agreement
External Transactions
Matching Principle (or Expense Recognition Principle)
21. Activities within an organization that can affect the accounting equation.
Internal transactions
Monetary Unit Assumption
Current Assets
Limited Liability Corporation
22. Income that is available after all of the essential financial commitments have been paid.
Going-concern Assumptions
Owner Withdrawals
Passive Income
Discretionary Income
23. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Money Market Account
Ledger
Preferred Stock
Statement of Owner's Equity
24. 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.
Mergers
Conceptual Framework
Managerial Accounting
Liabilities
25. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Shareholders
Interim Financial Statements
International Accounting Standards Board
Adjusting Entry
26. A legal entity that is seperate from its owners.
Chart of Accounts
IPO
Managerial Accounting
Corporations
27. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Partnership
Unearned Revenues
Accounting Cycle
Common Stock
28. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Events
SEC (Securites and Exchange Commision)
Temporary Accounts
Partnership
29. Outflows or using up of assets as part of operations of business to generate sales.
Net Loss
Double Entry Accounting
Current Assets
Expenses
30. 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.
Bonds
SEC (Securites and Exchange Commision)
Owner - Capital
Federal Reserve System
31. Statements that show the effect of proposed transactions and events as if they had occurred.
Cost-benefit Constraint
NASDAQ
Pro Forma Financial Statement
Debt Ratio
32. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
Discretionary Income
Journal
Accounting Period
33. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
SEC (Securites and Exchange Commision)
Partnership
Posting
34. Business owned by a single person.
Internal users
Working Papers
Sole Propietorship
Long Term Investments
35. Journal entries that affect at least three accounts.
International Accounting Standards Board
Source Documents
Compound Journal Entries
NYSE (New York Stock Exchange)
36. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Business Entity Assumption
Reversing Entries
Posting
Money Market Account
37. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Posting
Assets
Events
Cost-benefit Constraint
38. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Net Loss
Corporation
Accounting Period
T Account
39. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
International Accounting Standards Board
Pro Forma Financial Statement
SEC (Securites and Exchange Commision)
Return
40. Gross increase in equity from a company's business activities that earn income.
Unearned Revenue
Closing Entries
Revenues
International Financial Reporting Standards
41. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Fiscal Year
Accrued Revenues
T Account
Stock
42. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Financial Accounting Standards Board
Post Closing Trial Balance
Owner Withdrawals
Auditors
43. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Accounting
Cost Principle
Debt Ratio
Partnership Agreement
44. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Adjusted Trial Balance
Audit
Journal
Work Sheet
45. Process of recording transactions in a journal.
Assets
Trial balance
Passive Income
Journalizing
46. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Securities
Ethics
Partnership
Balance Sheet
47. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Classified Balance Sheet
Long Term Investments
Return on Assets
Sarbanes-Oxley Act (SOX)
48. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Closing process
Discretionary Income
Double Entry Accounting
Owner Investment
49. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Statement of Cash Flows
Trial balance
Current Liabilities
Passive Income
50. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Accrual Basis Accounting
Shares
Owner Withdrawals
Assets
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