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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. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Time Period Assumptions
Book Value
Partnership
Sole Proprietorship
2. Goals that are specific - measurable - attainable - realistic - and time bound.
Bailout
SMART Goal
Adjusted Trial Balance
Internal users
3. Loaning or giving money to a business in orer to save it from bankruptcy.
Intangible assets
Bailout
Owner - Capital
Working Papers
4. Happenings that both affect an organization's financial position and can be reliably measured.
Events
Present Value
Financial Accounting
NYSE (New York Stock Exchange)
5. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Income Summary
NYSE (New York Stock Exchange)
Accounting Equation
Adjusting Entry
6. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Return on Assets
Managerial Accounting
Sole Proprietorship
Bookkeeping
7. Uncertainty about expected return.
Measurement Principle
Pro Forma Financial Statement
Debit
Risk
8. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Acquisition
Adjusting Entry
Current Assets
Common Stock
9. Length of time covered by financial statements; also called reporting period.
Accounting Period
Revenues
Trial balance
Events
10. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Conceptual Framework
Account
Ledger
Long Term Investments
11. Creditors' claims on an organization's assets; involves a probable future payment of assets - products - or services that a company is obligated to make due to past transactions or events.
Liabilities
Chart of Accounts
Debt Ratio
Intangible assets
12. A loan that is backed by collateral such as cars - houses - or other assets.
Fixed Expense
Stock
Secured Loan
Journalizing
13. 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.
Ledger
Shareholders
Accrued Expenses
Accrued Revenues
14. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Matching Principle
Secured Loan
Financial Accounting Standards Board
Managerial Accounting
15. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Deficit
SEC (Securites and Exchange Commision)
Natural Business Years
Pro Forma Financial Statement
16. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Ethical Dilemma
Cost-benefit Constraint
Owner Withdrawals
Unclassified Balance Sheets
17. Accounting information is based on cost with potential subsequent adjustments to fair value.
Full Disclosure Principle
Sarbanes-Oxley Act (SOX)
Measurement Principle
Business Entity Assumption
18. Journal entry at the end of an accounting period to bring an asset or liability account to its proper amount and update the related expenses or revenue account.
Assets
Adjusting Entry
Managerial Accounting
Present Value
19. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Unadjusted Trial Balance
Net Loss
Accrued Expenses
Measurement Principle
20. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Current Ratio
Acquisition
Expenses
Generally Accepted Accounting Principles
21. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Risk Tolerance
Balance Sheet
Debtors
Temporary Accounts
22. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Posting Reference Column
Cash Basis Accounting
Partnership
Unsecured Loan
23. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Posting
Matching Principle (or Expense Recognition Principle)
Return
Income Summary
24. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Going-concern Assumptions
Audit
Accrued Expenses
Conceptual Framework
25. Record containing all accounts (with amounts) for a business.
Full Disclosure Principle
Balance Sheet
Ponzi Scheme
Ledger
26. Rules that specify acceptable accounting practices.
Unearned Revenues
Matching Principle
Partnership Agreement
Generally Accepted Accounting Principles
27. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Posting Reference Column
Trial balance
Mergers
Partnership Agreement
28. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Accounting Cycle
Depreciation
Long Term Investments
Statement of Owner's Equity
29. Individuals or organizations that owe money.
Limited Liability Corporation
Closing process
Preferred Stock
Debtors
30. Tool used to show the effects of transactions and events on individual accounts.
Managerial Accounting
T Account
Fixed Expense
Accounting Period
31. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Adjusted Trial Balance
Cost Principle
Financial Accounting Standards Board
Creditors
32. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Cash Basis Accounting
Business Entity Assumption
Stockholders
Monetary Unit Assumption
33. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Audit
Sole Propietorship
Fiscal Year
34. 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.
Debtors
Sole Propietorship
Matching Principle
Annual Financial Statements
35. 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.
Ponzi Scheme
Unclassified Balance Sheets
Plant Assets
Surplus
36. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Long Term Liabilities
Going-concern Assumptions
NASDAQ
Ledger
37. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Accrual Basis Accounting
Financial Accounting Standards Board
Preferred Stock
Statement of Cash Flows
38. Monies (or sums of money) received from an investment; often in percent form.
Return
Unadjusted Trial Balance
Securities
Full Disclosure Principle
39. Exchanges of economic value between one entity and another entity.
External Transactions
Accounting Cycle
Revenue Recognition Principle
Fiscal Year
40. Outflows or using up of assets as part of operations of business to generate sales.
Source Documents
Fiscal Year
Posting
Expenses
41. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Partnership Agreement
Book Value
Statement of Owner's Equity
Internal transactions
42. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Source Documents
Partnership
Secured Loan
Sarbanes-Oxley Act (SOX)
43. The combining of two or more comapnies into one larger company.
Measurement Principle
Mergers
Sole Proprietorship
Accounting Period
44. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Preferred Stock
International Accounting Standards Board
Post Closing Trial Balance
Events
45. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Time Period Assumptions
Common Stock
NYSE (New York Stock Exchange)
Double Entry Accounting
46. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Partnership
IRA (Individual Retirement Account)
Full Disclosure Principle
IPO
47. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Book Value
Ponzi Scheme
Return on Assets
Unearned Revenue
48. Individuals hired to review financial reports and information systems of organizations.
Auditors
Account
Partnership
Bonds
49. 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.
Matching Principle
Owner - Capital
Book Value
Ethical Dilemma
50. 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.
Account Balance
Reversing Entries
Income Statement
Present Value