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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. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Cash Basis Accounting
Balance Sheet
Federal Reserve System
Work Sheet
2. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Preferred Stock
Statement of Owner's Equity
Net Income
Cost-benefit Constraint
3. 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.
Secured Loan
Business Entity Assumption
Matching Principle
External Users
4. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Risk Tolerance
Mergers
Internal users
Book Value
5. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Journalizing
Revenue Recognition Principle
Unsecured Loan
Depreciation
6. Journal entries that affect at least three accounts.
Compound Journal Entries
Varaiable Expense
Chart of Accounts
Bailout
7. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Return on Assets
Temporary Accounts
Going-concern Assumptions
Unadjusted Trial Balance
8. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Prepaid Expenses
Stockholders
Shares
Expanded Accounting Equation
9. The combining of two or more comapnies into one larger company.
Corporation
Mergers
Unearned Revenues
Accounting Period
10. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Going-concern Assumptions
Bailout
Auditors
Classified Balance Sheet
11. Individuals hired to review financial reports and information systems of organizations.
Auditors
Plant Assets
Owner Investment
Reversing Entries
12. Length of time covered by financial statements; also called reporting period.
Varaiable Expense
Accounting Period
Money Market Account
Posting
13. 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
NYSE (New York Stock Exchange)
Preferred Stock
Bonds
Contra Account
14. Uncertainty about expected return.
Unclassified Balance Sheets
Acquisition
Risk
Plant Assets
15. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Intangible assets
Time Period Assumptions
Cost Principle
Ethical Dilemma
16. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Conceptual Framework
Prepaid Expenses
Long Term Liabilities
Return
17. 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
External Transactions
Auditors
Current Ratio
18. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Unsecured Loan
Long Term Liabilities
Debit
Deficit
19. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Double Entry Accounting
SEC (Securites and Exchange Commision)
Post Closing Trial Balance
Journalizing
20. The first time a company sells shares of its stock to the public.
Temporary Accounts
Working Papers
IPO
Sole Propietorship
21. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Secured Loan
Accounting
Closing Entries
CD (Certificate of Deposit)
22. Activities within an organization that can affect the accounting equation.
Adjusted Trial Balance
Internal transactions
Generally Accepted Accounting Principles
Matching Principle (or Expense Recognition Principle)
23. Rules that specify acceptable accounting practices.
Partnership
Compound Journal Entries
Generally Accepted Accounting Principles
Equity
24. Principle that assumes transactions and events can be expressed in money units.
Accounting Period
Conceptual Framework
Monetary Unit Assumption
Money Market Account
25. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Ethical Dilemma
Varaiable Expense
Monetary Unit Assumption
Double Entry Accounting
26. Business owned by two or more people.
Bookkeeping
Double Entry Accounting
Partnership
Classified Balance Sheet
27. Accounting information is based on cost with potential subsequent adjustments to fair value.
Prepaid Expenses
Money Market Account
Measurement Principle
Return
28. Owners of a corporation who usually receive dividends. Also called shareholders.
Stockholders
Work Sheet
Reversing Entries
Common Stock
29. A loan that is backed by collateral such as cars - houses - or other assets.
Sole Propietorship
Cost Principle
Balance Sheet
Secured Loan
30. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
External Transactions
Accrued Expenses
Credit
Operating Cycle
31. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Owner Investment
Sole Proprietorship
Trial balance
Permanent Accounts
32. Tool used to show the effects of transactions and events on individual accounts.
Annual Financial Statements
T Account
Financial Accounting Standards Board
Business Entity Assumption
33. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Post Closing Trial Balance
NASDAQ
Unearned Revenues
Compound Journal Entries
34. 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.
Accounting Equation
Post Closing Trial Balance
Money Market Account
International Financial Reporting Standards
35. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Journal
Annual Financial Statements
Varaiable Expense
Double Entry Accounting
36. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Bonds
Straight-line Depreciation Method
Credit
Financial Accounting Standards Board
37. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Net Loss
Current Liabilities
Revenue Recognition Principle
Materiality Constraint
38. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Bookkeeping
Temporary Accounts
Contra Account
Cost-benefit Constraint
39. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Stock
Bailout
Long Term Investments
Current Assets
40. 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.
Revenue Recognition Principle
NASDAQ
Equity
Common Stock
41. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Full Disclosure Principle
Revenues
Book Value
Federal Reserve System
42. 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
Financial Accounting Standards Board
Audit
Expanded Accounting Equation
Monetary Unit Assumption
43. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Mergers
Matching Principle
Managerial Accounting
Unearned Revenue
44. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Time Period Assumptions
Closing process
Long Term Liabilities
General Journal
45. Difference between total debits and total credits (including the beginning balance) for an account.
Account Balance
Varaiable Expense
Owner - Capital
Bonds
46. Gross increase in equity from a company's business activities that earn income.
Audit
Journalizing
Revenues
Reversing Entries
47. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Net Income
Accrued Expenses
Work Sheet
Contra Account
48. 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
Expense Recognition Principle
Fixed Expense
Partnership
49. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Accrued Expenses
NASDAQ
Revenue Recognition Principle
50. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Return on Assets
Book Value
Money Market Account
Posting Reference Column