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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.
Shares
Accounting Period
Matching Principle
Creditors
2. Individuals or organizations that owe money.
Federal Reserve System
Debtors
Measurement Principle
Partnership Agreement
3. 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.
Working Papers
Common Stock
Unearned Revenues
Adjusting Entry
4. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Posting Reference Column
Ethical Dilemma
Working Papers
Cost Principle
5. 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.
Return on Assets
Book Value
Reversing Entries
Current Liabilities
6. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Source Documents
Balance Sheet
Revenue Recognition Principle
Secured Loan
7. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Going-concern Assumptions
Long Term Investments
Full Disclosure Principle
Adjusting Entry
8. 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.
Statement of Cash Flows
Time Period Assumptions
Expense Recognition Principle
Reversing Entries
9. Exchanges of economic value between one entity and another entity.
Shareholders
Managerial Accounting
External Transactions
Unadjusted Trial Balance
10. Report of changes in equity over a period; adjusted for increases and for decreases.
11. Items paid for in advance of receiving their benefits. Classified as assets.
Passive Income
Prepaid Expenses
Profit Margin
International Financial Reporting Standards
12. A corporation's basic ownership share.
Common Stock
Unearned Revenue
Sole Proprietorship
Mergers
13. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Financial Accounting Standards Board
Straight-line Depreciation Method
Bonds
Return on Assets
14. The twelve month period that ends when a company's sales activities are at their lowest point.
Natural Business Years
Discretionary Income
Closing Entries
Net Income
15. 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.
Equity
T Account
Accrued Revenues
Pro Forma Financial Statement
16. 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
Cost-benefit Constraint
Varaiable Expense
Contra Account
17. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Statement of Owner's Equity
Sole Proprietorship
Materiality Constraint
Limited Liability Corporation
18. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Internal transactions
Contra Account
Adjusted Trial Balance
Stock
19. Rules that specify acceptable accounting practices.
Unclassified Balance Sheets
Generally Accepted Accounting Principles
T Account
Operating Cycle
20. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
SMART Goal
Financial Accounting
Ethical Dilemma
Accounting
21. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Managerial Accounting
NYSE (New York Stock Exchange)
Long Term Liabilities
Unclassified Balance Sheets
22. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Accrual Basis Accounting
Limited Liability Corporation
Debit
Bonds
23. Principle that assumes transactions and events can be expressed in money units.
Revenues
Full Disclosure Principle
Monetary Unit Assumption
Fixed Expense
24. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Partnership
Intangible assets
Accrued Expenses
Owner - Capital
25. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Interim Financial Statements
Ledger
Current Assets
IRA (Individual Retirement Account)
26. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Fixed Expense
Managerial Accounting
Statement of Owner's Equity
Time Period Assumptions
27. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Income Summary
Natural Business Years
Fiscal Year
Stock
28. Expenses that remain the same regardless of the circumstances.
Ponzi Scheme
Fixed Expense
SMART Goal
Long Term Liabilities
29. A tax deferred account that allows individuals to plan for their retirement.
Liabilities
Equity
Present Value
IRA (Individual Retirement Account)
30. 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
Partnership Agreement
Expanded Accounting Equation
Assets
Cost-benefit Constraint
31. Statements that show the effect of proposed transactions and events as if they had occurred.
Interim Financial Statements
Statement of Cash Flows
Monetary Unit Assumption
Pro Forma Financial Statement
32. The principle prescribing that revenue is recognized when earned.
Revenue Recognition Principle
NYSE (New York Stock Exchange)
Owner Withdrawals
SMART Goal
33. Financial statement that subtracts expenses from revenues to yield a net income or loss over a specified period of time; also includes any gains or losses.
Income Statement
Accounting Equation
Varaiable Expense
Securities and Exchange Commission
34. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Revenue Recognition Principle
Passive Income
Intangible assets
Contra Account
35. Owners of a corporation who usually receive dividends. Also called stockholders.
Portfolio Income
Unearned Revenues
Shareholders
Net Loss
36. Record containing all accounts (with amounts) for a business.
Ledger
International Accounting Standards Board
Revenues
IRA (Individual Retirement Account)
37. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Source Documents
Auditors
Ethics
Generally Accepted Accounting Principles
38. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Recordkeeping
Account
Annual Financial Statements
CD (Certificate of Deposit)
39. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Varaiable Expense
Accrual Basis Accounting
Passive Income
Unearned Revenues
40. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Journal
Recordkeeping
Return on Assets
NYSE (New York Stock Exchange)
41. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Credit
Money Market Account
Monetary Unit Assumption
Discretionary Income
42. Gross increase in equity from a company's business activities that earn income.
Revenues
Prepaid Expenses
Revenue Recognition Principle
Accounting Equation
43. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Limited Liability Corporation
Owner - Capital
Annual Financial Statements
Time Period Assumptions
44. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Closing process
Chart of Accounts
Secured Loan
Partnership
45. 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
Unsecured Loan
Varaiable Expense
Adjusted Trial Balance
46. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Equity
Interim Financial Statements
Posting
Plant Assets
47. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Preferred Stock
Limited Liability Corporation
Pro Forma Financial Statement
Shares
48. Happenings that both affect an organization's financial position and can be reliably measured.
Book Value
Sole Propietorship
Events
Post Closing Trial Balance
49. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Pro Forma Financial Statement
Preferred Stock
Debit
Acquisition
50. Temporary account used only in the closing process to which the balances of revenue and expense accounts (including any gains or losses) are transferred. Its balance is transferred to the capital account (or retained earnings for a corporation).
Monetary Unit Assumption
Accounting Period
Income Summary
Compound Journal Entries