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Test your basic knowledge |
DSST Principles Of Finance
Start Test
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. Length of time covered by financial statements; also called reporting period.
Assets
IPO
Profit Margin
Accounting Period
2. Expenses that remain the same regardless of the circumstances.
Fixed Expense
Current Liabilities
Credit
Stockholders
3. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Bookkeeping
Plant Assets
Unearned Revenue
Debit
4. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
SMART Goal
Equity
Common Stock
Assets
5. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Acquisition
Conceptual Framework
Mergers
Cash Basis Accounting
6. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Owner Withdrawals
Adjusted Trial Balance
Managerial Accounting
7. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Going-concern Assumptions
Source Documents
Limited Liability Corporation
Equity
8. Journal entries that affect at least three accounts.
Posting
Compound Journal Entries
Federal Reserve System
Sole Propietorship
9. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
IPO
Limited Liability Corporation
Double Entry Accounting
Credit
10. Individuals or organizations entitled to receive payments
Materiality Constraint
Income Statement
Time Period Assumptions
Creditors
11. 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.
Risk
Corporations
Cash Basis Accounting
Ponzi Scheme
12. 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
Current Ratio
Measurement Principle
Ethics
13. A corporation's basic ownership share.
Fiscal Year
Recordkeeping
Generally Accepted Accounting Principles
Common Stock
14. Excess of expenses over revenues for a period.
Common Stock
Managerial Accounting
Adjusted Trial Balance
Net Loss
15. Owners of a corporation who usually receive dividends. Also called stockholders.
CD (Certificate of Deposit)
Unclassified Balance Sheets
Portfolio Income
Shareholders
16. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Financial Accounting
Business Entity Assumption
Fiscal Year
Conceptual Framework
17. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Federal Reserve System
Unearned Revenue
CD (Certificate of Deposit)
Audit
18. 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.
Revenue Recognition Principle
Reversing Entries
Plant Assets
Business Entity Assumption
19. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Ethics
Accounting
Unearned Revenues
Account
20. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Time Period Assumptions
Contra Account
Accounting Cycle
Long Term Investments
21. Income that is available after all of the essential financial commitments have been paid.
Contra Account
Discretionary Income
Corporation
IPO
22. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Matching Principle (or Expense Recognition Principle)
Net Loss
Plant Assets
Annual Financial Statements
23. Persons using accounting information who are directly involved in managing the organization.
Internal users
Stock
Return
Journalizing
24. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Book Value
Full Disclosure Principle
Generally Accepted Accounting Principles
IPO
25. The money left over when income exceeds expenditure.
Surplus
Unclassified Balance Sheets
Stockholders
Equity
26. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Ethics
General Journal
Compound Journal Entries
Time Period Assumptions
27. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Portfolio Income
Journal
Ethical Dilemma
Cash Basis Accounting
28. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Sarbanes-Oxley Act (SOX)
Intangible assets
Contra Account
Adjusted Trial Balance
29. Area of accounting aimed mainly at serving external users.
Financial Accounting
Income Summary
Pro Forma Financial Statement
Posting
30. 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.
Matching Principle
Time Period Assumptions
Unsecured Loan
Operating Cycle
31. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Balance Sheet
Ponzi Scheme
Monetary Unit Assumption
Statement of Cash Flows
32. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Net Income
International Financial Reporting Standards
Business Entity Assumption
Corporation
33. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Stock
Full Disclosure Principle
Working Papers
Risk Tolerance
34. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Cash Basis Accounting
Permanent Accounts
Debit
Accounting
35. A tax deferred account that allows individuals to plan for their retirement.
IRA (Individual Retirement Account)
Return
Stock
Discretionary Income
36. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Bookkeeping
Classified Balance Sheet
Journalizing
Pro Forma Financial Statement
37. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
International Accounting Standards Board
Money Market Account
Measurement Principle
Discretionary Income
38. Loaning or giving money to a business in orer to save it from bankruptcy.
Bailout
Revenues
Unearned Revenue
Journalizing
39. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Journalizing
Corporation
Securities and Exchange Commission
Account
40. 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.
NASDAQ
Account Balance
Ethics
Owner - Capital
41. Principle that assumes transactions and events can be expressed in money units.
Expanded Accounting Equation
Closing Entries
Cost-benefit Constraint
Monetary Unit Assumption
42. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Account Balance
Account
Owner Withdrawals
Operating Cycle
43. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Cash Basis Accounting
Going-concern Assumptions
Internal transactions
Long Term Investments
44. A loan that is backed by collateral such as cars - houses - or other assets.
Federal Reserve System
Reversing Entries
Expense Recognition Principle
Secured Loan
45. A legal entity that is seperate from its owners.
Corporations
Prepaid Expenses
Limited Liability Corporation
Financial Accounting Standards Board
46. Assets pulled out of the business by the owner.
Owner Withdrawals
Internal users
Working Papers
Financial Accounting
47. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Cash Basis Accounting
Income Statement
Bailout
Temporary Accounts
48. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Account
Accounting Cycle
Income Statement
Bailout
49. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Shares
Owner - Capital
Double Entry Accounting
Unadjusted Trial Balance
50. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Prepaid Expenses
Permanent Accounts
Recordkeeping
Classified Balance Sheet