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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. Loaning or giving money to a business in orer to save it from bankruptcy.
Time Period Assumptions
Bailout
Source Documents
Revenues
2. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Work Sheet
Portfolio Income
Revenues
Compound Journal Entries
3. Tool used to show the effects of transactions and events on individual accounts.
Cost-benefit Constraint
Account Balance
T Account
Partnership
4. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
Assets
Intangible assets
Current Liabilities
5. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenues
Surplus
Risk Tolerance
Account Balance
6. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Current Ratio
Balance Column Account
Expanded Accounting Equation
Corporation
7. Rules that specify acceptable accounting practices.
Generally Accepted Accounting Principles
Profit Margin
Contra Account
Cost-benefit Constraint
8. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Contra Account
Owner - Capital
Depreciation
Ledger
9. Expenses that remain the same regardless of the circumstances.
Financial Accounting
Money Market Account
Fixed Expense
Expense Recognition Principle
10. Accounting information is based on cost with potential subsequent adjustments to fair value.
International Accounting Standards Board
Measurement Principle
Accrued Expenses
Book Value
11. 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).
Portfolio Income
Closing Entries
Passive Income
External Transactions
12. Assets pulled out of the business by the owner.
Shares
Balance Column Account
Pro Forma Financial Statement
Owner Withdrawals
13. Exchanges of economic value between one entity and another entity.
External Transactions
Financial Accounting
Sarbanes-Oxley Act (SOX)
Plant Assets
14. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Going-concern Assumptions
Preferred Stock
Plant Assets
Adjusting Entry
15. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Accounting Equation
Cost-benefit Constraint
Double Entry Accounting
Intangible assets
16. 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.
Common Stock
Present Value
External Users
Compound Journal Entries
17. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Journalizing
Net Income
Limited Liability Corporation
Expense Recognition Principle
18. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Profit Margin
Recordkeeping
Accounting Period
Credit
19. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Liabilities
Ethical Dilemma
Risk Tolerance
Generally Accepted Accounting Principles
20. 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.
Recordkeeping
Journalizing
Matching Principle
Stock
21. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Accounting Equation
Statement of Owner's Equity
Straight-line Depreciation Method
Sarbanes-Oxley Act (SOX)
22. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Interim Financial Statements
Creditors
Unearned Revenues
Income Statement
23. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
Assets
Financial Accounting Standards Board
Limited Liability Corporation
24. List of accounts used by a company' includes and identification number for each account.
Debt Ratio
Chart of Accounts
Partnership
Discretionary Income
25. Business owned by two or more people.
Closing Entries
Working Papers
General Journal
Partnership
26. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Owner Withdrawals
Source Documents
SEC (Securites and Exchange Commision)
Shares
27. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Secured Loan
Long Term Investments
Balance Column Account
Prepaid Expenses
28. Individuals or organizations entitled to receive payments
Creditors
Pro Forma Financial Statement
NYSE (New York Stock Exchange)
Compound Journal Entries
29. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Journalizing
Sarbanes-Oxley Act (SOX)
Ethics
Time Period Assumptions
30. 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
Assets
Preferred Stock
Journalizing
Prepaid Expenses
31. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting Reference Column
Closing Entries
Balance Sheet
Internal users
32. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Debit
Sarbanes-Oxley Act (SOX)
Accrued Revenues
Materiality Constraint
33. 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.
Balance Column Account
Ponzi Scheme
Ethical Dilemma
Liabilities
34. Journal entries that affect at least three accounts.
Compound Journal Entries
Unadjusted Trial Balance
Natural Business Years
Unclassified Balance Sheets
35. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Stockholders
Materiality Constraint
Unadjusted Trial Balance
Closing Entries
36. 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.
NYSE (New York Stock Exchange)
Going-concern Assumptions
Accounting
Closing Entries
37. 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.
Account
Working Papers
International Financial Reporting Standards
Contra Account
38. An expense that changes from period to perio - such as food or gasoline costs.
Varaiable Expense
Unsecured Loan
Fixed Expense
Unearned Revenue
39. The central bank of the United States - with 12 Federal Reserve branch banks located in major cities throughout the nation. It helps to regulate the US monetary and banking system.
Adjusted Trial Balance
General Journal
Contra Account
Federal Reserve System
40. Individuals hired to review financial reports and information systems of organizations.
Net Loss
Auditors
Temporary Accounts
Accrued Revenues
41. 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.
Intangible assets
Credit
Bonds
Journal
42. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Varaiable Expense
Stock
Debit
Limited Liability Corporation
43. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Operating Cycle
Conceptual Framework
Closing Entries
Expanded Accounting Equation
44. Gross increase in equity from a company's business activities that earn income.
Revenues
Debit
Operating Cycle
Statement of Cash Flows
45. Assets put into the business by the owner.
Fiscal Year
Liabilities
Statement of Cash Flows
Owner Investment
46. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Surplus
Trial balance
Expanded Accounting Equation
47. Record containing all accounts (with amounts) for a business.
SEC (Securites and Exchange Commision)
Ledger
External Transactions
External Users
48. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Return on Assets
Contra Account
Cost-benefit Constraint
Partnership Agreement
49. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Generally Accepted Accounting Principles
Matching Principle (or Expense Recognition Principle)
Stockholders
International Financial Reporting Standards
50. Length of time covered by financial statements; also called reporting period.
Deficit
Accounting Period
Surplus
Accrued Expenses