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Test your basic knowledge |
DSST Principles Of Finance
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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. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Credit
Measurement Principle
Revenues
Stock
2. The twelve month period that ends when a company's sales activities are at their lowest point.
Natural Business Years
Compound Journal Entries
Full Disclosure Principle
Return
3. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Current Liabilities
Common Stock
Partnership
Ethical Dilemma
4. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Going-concern Assumptions
General Journal
Full Disclosure Principle
Common Stock
5. 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.
Owner - Capital
Audit
Net Income
Reversing Entries
6. Report of changes in equity over a period; adjusted for increases and for decreases.
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7. Accounting information is based on cost with potential subsequent adjustments to fair value.
Limited Liability Corporation
Net Income
Measurement Principle
Trial balance
8. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Current Ratio
Long Term Investments
Ethics
Present Value
9. The money left over when income exceeds expenditure.
Surplus
Closing process
Present Value
Unadjusted Trial Balance
10. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Shares
Ponzi Scheme
Corporations
Account
11. 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.
International Accounting Standards Board
Ponzi Scheme
General Journal
Federal Reserve System
12. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
SEC (Securites and Exchange Commision)
Risk Tolerance
Interim Financial Statements
Operating Cycle
13. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Conceptual Framework
Posting Reference Column
Owner - Capital
Partnership Agreement
14. Assets pulled out of the business by the owner.
Journal
Owner Withdrawals
Closing Entries
Securities and Exchange Commission
15. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Accrued Expenses
International Accounting Standards Board
Unadjusted Trial Balance
Profit Margin
16. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Expenses
Debtors
Current Ratio
Interim Financial Statements
17. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Bookkeeping
Cost Principle
Operating Cycle
Revenues
18. Rules that specify acceptable accounting practices.
Generally Accepted Accounting Principles
Long Term Liabilities
Permanent Accounts
Corporation
19. The central bank of the United States - with 12 Federal Reserve branch banks located in major cities throughout the nation. It helps to regulate the US monetary and banking system.
Federal Reserve System
IPO
Cash Basis Accounting
General Journal
20. 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.
Intangible assets
Income Statement
Discretionary Income
Adjusted Trial Balance
21. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Accrual Basis Accounting
Journalizing
Fiscal Year
Return
22. Excess of expenses over revenues for a period.
Net Loss
Accounting Period
Debt Ratio
Statement of Cash Flows
23. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Common Stock
CD (Certificate of Deposit)
Account Balance
International Accounting Standards Board
24. Length of time covered by financial statements; also called reporting period.
Risk
Accounting Period
Managerial Accounting
Stock
25. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Accrued Expenses
Partnership Agreement
Creditors
Contra Account
26. A corporation's basic ownership share.
Managerial Accounting
Sole Propietorship
Classified Balance Sheet
Common Stock
27. Gross increase in equity from a company's business activities that earn income.
Current Ratio
Revenues
Corporation
Natural Business Years
28. 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
Intangible assets
Expanded Accounting Equation
Acquisition
Fixed Expense
29. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Posting Reference Column
Current Assets
Matching Principle
Ledger
30. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
International Accounting Standards Board
Secured Loan
Long Term Liabilities
Depreciation
31. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Trial balance
Accounting
External Users
Auditors
32. Happenings that both affect an organization's financial position and can be reliably measured.
Fiscal Year
Sarbanes-Oxley Act (SOX)
Events
Limited Liability Corporation
33. 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.
Expense Recognition Principle
CD (Certificate of Deposit)
SMART Goal
Risk Tolerance
34. All purpose journal for recording the debits and credits of transactions and events.
Accrued Expenses
CD (Certificate of Deposit)
Owner Withdrawals
General Journal
35. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
CD (Certificate of Deposit)
Debt Ratio
External Transactions
Cash Basis Accounting
36. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Owner Investment
Unsecured Loan
Depreciation
Business Entity Assumption
37. 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.
Reversing Entries
Owner Withdrawals
Owner - Capital
Statement of Owner's Equity
38. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Debt Ratio
SMART Goal
Partnership Agreement
Deficit
39. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Adjusted Trial Balance
Unsecured Loan
Posting
Partnership
40. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Intangible assets
Journal
Fiscal Year
Reversing Entries
41. Income that is available after all of the essential financial commitments have been paid.
Discretionary Income
Balance Sheet
Posting Reference Column
Annual Financial Statements
42. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Owner - Capital
Bailout
Unearned Revenues
Ethics
43. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Cash Basis Accounting
Cost Principle
Classified Balance Sheet
Account
44. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Return
Trial balance
Managerial Accounting
Unearned Revenues
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
Income Statement
Net Loss
Ethical Dilemma
46. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Post Closing Trial Balance
Owner Investment
Balance Sheet
Adjusting Entry
47. Business owned by two or more people.
Compound Journal Entries
Partnership
Matching Principle (or Expense Recognition Principle)
Accrued Revenues
48. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Compound Journal Entries
Journal
Adjusted Trial Balance
Straight-line Depreciation Method
49. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Expanded Accounting Equation
International Accounting Standards Board
Equity
Balance Column Account
50. Area of accounting aimed mainly at serving external users.
Partnership
Adjusting Entry
Sole Proprietorship
Financial Accounting