Test your basic knowledge |

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






2. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.






3. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.






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






5. Rules that specify acceptable accounting practices.






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






7. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.






8. 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.






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






10. Assets pulled out of the business by the owner.






11. 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.






12. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.






13. Business owned by a single person.






14. A loan that is not backed by collateral - but by the promise of the borrower to repay it.






15. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.






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.






17. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.






18. Excess of expenses over revenues for a period.






19. Create the Public Company Accounting Oversight Board - regulates analyst conflicts - imposes corporate governance requirements - enhances accounting and control disclosures - impacts insider transactions and executive loans - establishes new types of






20. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.






21. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.






22. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.






23. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.






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






25. Uncertainty about expected return.






26. Resources that a company owns or controls that are expected to provide current and future benefits to the business.






27. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.






28. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.






29. 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






30. Process of transferring journal entry information to the ledger; computerized systems automate this process.






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






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






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






34. All purpose journal for recording the debits and credits of transactions and events.






35. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.






36. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.






37. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.






38. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.






39. 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.






40. Journal entries that affect at least three accounts.






41. A tax deferred account that allows individuals to plan for their retirement.






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






43. Unincorporated association of two or more persons to pursue a business for profit as co-owners.






44. The first time a company sells shares of its stock to the public.






45. Analysis and report of an organization's accounting system - its records - and its reports using various tests.






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






47. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.






48. A corporation's basic ownership share.






49. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.






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