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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. Excess of expenses over revenues for a period.
Return
SMART Goal
Net Loss
Time Period Assumptions
2. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Corporations
Acquisition
Unadjusted Trial Balance
Fiscal Year
3. Persons using accounting information who are directly involved in managing the organization.
Cash Basis Accounting
Journal
Pro Forma Financial Statement
Internal users
4. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Current Assets
Annual Financial Statements
Bonds
Long Term Liabilities
5. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Fiscal Year
Operating Cycle
Book Value
Audit
6. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Statement of Cash Flows
Partnership
Common Stock
Working Papers
7. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Accounting
Unclassified Balance Sheets
Long Term Investments
Stock
8. Tool used to show the effects of transactions and events on individual accounts.
Operating Cycle
Expenses
Debt Ratio
T Account
9. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Straight-line Depreciation Method
Return
Unsecured Loan
Contra Account
10. A written framework to guide the development - preparation - and interpretation of financial accounting information.
IRA (Individual Retirement Account)
Ledger
Conceptual Framework
Current Liabilities
11. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Posting
Risk Tolerance
Going-concern Assumptions
Accrual Basis Accounting
12. 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
Debt Ratio
Events
Expanded Accounting Equation
Matching Principle
13. Accounting information is based on cost with potential subsequent adjustments to fair value.
Measurement Principle
International Accounting Standards Board
Time Period Assumptions
Common Stock
14. 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.
Expenses
Accrued Revenues
CD (Certificate of Deposit)
Work Sheet
15. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Unsecured Loan
Natural Business Years
Bailout
Current Liabilities
16. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Accounting
Statement of Owner's Equity
Time Period Assumptions
Journal
17. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Credit
NYSE (New York Stock Exchange)
Financial Accounting
Bonds
18. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Deficit
Depreciation
External Users
Cash Basis Accounting
19. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Creditors
Securities
Book Value
NASDAQ
20. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Money Market Account
Risk Tolerance
Creditors
Accounting Equation
21. 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.
Operating Cycle
Posting Reference Column
Liabilities
Adjusted Trial Balance
22. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Accounting
Fixed Expense
Matching Principle (or Expense Recognition Principle)
Financial Accounting
23. An expense that changes from period to perio - such as food or gasoline costs.
Risk
Accrued Expenses
Adjusted Trial Balance
Varaiable Expense
24. Persons using accounting information who are not directly involved in running the organization.
External Users
Sole Proprietorship
Balance Sheet
Expenses
25. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Profit Margin
Secured Loan
Compound Journal Entries
Auditors
26. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Reversing Entries
Common Stock
Unearned Revenues
Debt Ratio
27. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Sole Proprietorship
Statement of Owner's Equity
Recordkeeping
General Journal
28. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Bookkeeping
Closing Entries
Ethical Dilemma
External Transactions
29. Expenses that remain the same regardless of the circumstances.
Fixed Expense
Common Stock
Sole Propietorship
Accounting Equation
30. Individuals or organizations that owe money.
Debtors
Sole Proprietorship
Securities
Mergers
31. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Trial balance
Deficit
Long Term Liabilities
Partnership Agreement
32. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Money Market Account
Debit
Conceptual Framework
Long Term Investments
33. Difference between total debits and total credits (including the beginning balance) for an account.
Account Balance
Debtors
IRA (Individual Retirement Account)
Net Loss
34. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Permanent Accounts
Book Value
Full Disclosure Principle
IPO
35. 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
Preferred Stock
Full Disclosure Principle
Unsecured Loan
Creditors
36. Process of recording transactions in a journal.
Statement of Owner's Equity
Liabilities
SMART Goal
Journalizing
37. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Work Sheet
Annual Financial Statements
Straight-line Depreciation Method
Going-concern Assumptions
38. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Common Stock
Statement of Cash Flows
Credit
39. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Money Market Account
Natural Business Years
Expense Recognition Principle
Accounting Cycle
40. 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
Accounting Equation
External Users
Current Liabilities
41. The combining of two or more comapnies into one larger company.
Mergers
Corporations
Statement of Owner's Equity
Partnership
42. A legal entity that is seperate from its owners.
Work Sheet
Managerial Accounting
Corporations
Plant Assets
43. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Internal users
Adjusting Entry
Limited Liability Corporation
Federal Reserve System
44. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting Reference Column
Revenues
Annual Financial Statements
Unsecured Loan
45. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Internal users
Accrued Expenses
Cost-benefit Constraint
Monetary Unit Assumption
46. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Owner Withdrawals
Debt Ratio
Reversing Entries
General Journal
47. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Balance Column Account
Partnership
Financial Accounting Standards Board
Passive Income
48. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Partnership
Unclassified Balance Sheets
Corporation
Shareholders
49. 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.
Contra Account
Preferred Stock
Bonds
Permanent Accounts
50. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Ethics
Time Period Assumptions
Cost-benefit Constraint
Deficit