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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. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Time Period Assumptions
Accounting Period
Managerial Accounting
Current Assets
2. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
International Financial Reporting Standards
Money Market Account
Accrual Basis Accounting
Liabilities
3. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Intangible assets
NASDAQ
Bookkeeping
Surplus
4. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Ethical Dilemma
Risk Tolerance
Debt Ratio
Business Entity Assumption
5. A loan that is backed by collateral such as cars - houses - or other assets.
Present Value
Fiscal Year
Measurement Principle
Secured Loan
6. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Ledger
Revenue Recognition Principle
Closing process
Internal users
7. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Liabilities
Debit
Discretionary Income
Unsecured Loan
8. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership
IPO
Time Period Assumptions
Journalizing
9. Individuals or organizations that owe money.
Posting Reference Column
Partnership
Debtors
Fixed Expense
10. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Ethics
Income Statement
Passive Income
Money Market Account
11. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Closing process
Stockholders
Straight-line Depreciation Method
Natural Business Years
12. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Sole Proprietorship
Plant Assets
Generally Accepted Accounting Principles
Expenses
13. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Financial Accounting
Current Liabilities
Unearned Revenue
Working Papers
14. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Classified Balance Sheet
Ponzi Scheme
NYSE (New York Stock Exchange)
Chart of Accounts
15. Tool used to show the effects of transactions and events on individual accounts.
Adjusting Entry
Owner Investment
Financial Accounting
T Account
16. 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.
Accrued Revenues
Plant Assets
Going-concern Assumptions
Income Summary
17. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Double Entry Accounting
Expanded Accounting Equation
Bookkeeping
18. Journal entries that affect at least three accounts.
Federal Reserve System
Accounting Equation
Conceptual Framework
Compound Journal Entries
19. Activities within an organization that can affect the accounting equation.
Revenues
International Accounting Standards Board
Internal transactions
Preferred Stock
20. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Bookkeeping
Unadjusted Trial Balance
Deficit
Unclassified Balance Sheets
21. 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.
Cost Principle
Equity
Plant Assets
Business Entity Assumption
22. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Mergers
Trial balance
Closing Entries
Expense Recognition Principle
23. Uncertainty about expected return.
Preferred Stock
Bonds
Risk
Equity
24. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Portfolio Income
Accounting
Partnership Agreement
Prepaid Expenses
25. Accounting standards set by the IASB which aim to develop a single set of global standards - to promote those standards - and converge national and international standards globally.
Revenues
Ponzi Scheme
Owner - Capital
International Financial Reporting Standards
26. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Stock
Stockholders
Acquisition
Time Period Assumptions
27. Gross increase in equity from a company's business activities that earn income.
Revenues
Profit Margin
Revenue Recognition Principle
Liabilities
28. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Partnership
Business Entity Assumption
Revenue Recognition Principle
Income Summary
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
Sarbanes-Oxley Act (SOX)
Accounting Cycle
Bonds
Ponzi Scheme
30. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Business Entity Assumption
Present Value
Securities and Exchange Commission
Depreciation
31. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Full Disclosure Principle
Unearned Revenue
Materiality Constraint
Ponzi Scheme
32. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Securities
Balance Column Account
Time Period Assumptions
General Journal
33. Area of accounting aimed mainly at serving external users.
Depreciation
Matching Principle (or Expense Recognition Principle)
Accrual Basis Accounting
Financial Accounting
34. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Present Value
Expanded Accounting Equation
Debit
Temporary Accounts
35. Difference between total debits and total credits (including the beginning balance) for an account.
Ethics
External Users
Chart of Accounts
Account Balance
36. Length of time covered by financial statements; also called reporting period.
Events
Double Entry Accounting
Internal transactions
Accounting Period
37. The principle prescribing that revenue is recognized when earned.
Owner - Capital
T Account
Revenue Recognition Principle
Unadjusted Trial Balance
38. A legal entity that is seperate from its owners.
Double Entry Accounting
Preferred Stock
Corporations
Prepaid Expenses
39. 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.
Business Entity Assumption
Accrued Expenses
Ponzi Scheme
Long Term Liabilities
40. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Accounting
Shares
Fiscal Year
Matching Principle
41. 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.
NASDAQ
Managerial Accounting
Common Stock
Current Liabilities
42. 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
Cash Basis Accounting
Internal users
Preferred Stock
Risk
43. Income from investments - including dividends - interest - or the sale of a property.
Pro Forma Financial Statement
Common Stock
T Account
Portfolio Income
44. Independent group of full-time members responsible for setting accounting rules.
Auditors
Passive Income
Financial Accounting Standards Board
General Journal
45. Happenings that both affect an organization's financial position and can be reliably measured.
Sole Proprietorship
Events
Full Disclosure Principle
Present Value
46. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Compound Journal Entries
Creditors
Account
Unadjusted Trial Balance
47. Assets pulled out of the business by the owner.
Owner Withdrawals
Income Summary
Profit Margin
Equity
48. 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).
Closing Entries
Intangible assets
Securities and Exchange Commission
Unearned Revenue
49. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Recordkeeping
Expenses
Sarbanes-Oxley Act (SOX)
Work Sheet
50. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Limited Liability Corporation
Corporations
Partnership
Current Ratio
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