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DSST Principles Of Finance

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.






2. Goals that are specific - measurable - attainable - realistic - and time bound.






3. Loaning or giving money to a business in orer to save it from bankruptcy.






4. Happenings that both affect an organization's financial position and can be reliably measured.






5. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity






6. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.






7. Uncertainty about expected return.






8. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.






9. Length of time covered by financial statements; also called reporting period.






10. A written framework to guide the development - preparation - and interpretation of financial accounting information.






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.






12. A loan that is backed by collateral such as cars - houses - or other assets.






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.






14. Area of accounting aimed mainly at serving the decision-making needs of internal users.






15. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.






16. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.






17. Accounting information is based on cost with potential subsequent adjustments to fair value.






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.






19. List of accounts and balances prepared before accounting adjustments are recorded and posted.






20. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.






21. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.






22. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.






23. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.






24. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.






25. Record containing all accounts (with amounts) for a business.






26. Rules that specify acceptable accounting practices.






27. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.






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.






29. Individuals or organizations that owe money.






30. Tool used to show the effects of transactions and events on individual accounts.






31. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.






32. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.






33. The value of a future cash steam discounted at the appropriate market interest rate.






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.






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.






36. Obligations not due to be paid within one year or the operating cycle - whichever is longer.






37. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.






38. Monies (or sums of money) received from an investment; often in percent form.






39. Exchanges of economic value between one entity and another entity.






40. Outflows or using up of assets as part of operations of business to generate sales.






41. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.






42. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.






43. The combining of two or more comapnies into one larger company.






44. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.






45. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.






46. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.






47. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.






48. Individuals hired to review financial reports and information systems of organizations.






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.






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.