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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. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
CD (Certificate of Deposit)
Time Period Assumptions
Preferred Stock
Balance Sheet
2. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Revenues
Internal transactions
Journalizing
Materiality Constraint
3. Persons using accounting information who are not directly involved in running the organization.
Expanded Accounting Equation
Journalizing
External Users
Current Liabilities
4. Income that is available after all of the essential financial commitments have been paid.
Credit
Discretionary Income
Expenses
Passive Income
5. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Posting Reference Column
Unearned Revenues
Post Closing Trial Balance
Journal
6. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Pro Forma Financial Statement
Income Statement
Source Documents
Accounting Equation
7. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Recordkeeping
Passive Income
Unearned Revenue
Classified Balance Sheet
8. 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.
Matching Principle
Stockholders
Materiality Constraint
Current Liabilities
9. Owner's claim on the assets of a business; equals the residual interest in an entity's assets after deducting liabilities. Also called net assets.
Stockholders
Equity
Long Term Liabilities
Ethics
10. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Temporary Accounts
Current Assets
Revenues
Managerial Accounting
11. The value of a future cash steam discounted at the appropriate market interest rate.
Bonds
Present Value
Accrued Revenues
Securities and Exchange Commission
12. List of accounts used by a company' includes and identification number for each account.
Straight-line Depreciation Method
Chart of Accounts
Post Closing Trial Balance
Return on Assets
13. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Classified Balance Sheet
SMART Goal
Owner Withdrawals
Long Term Investments
14. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Cash Basis Accounting
Recordkeeping
Securities and Exchange Commission
IPO
15. Exchanges of economic value between one entity and another entity.
Varaiable Expense
External Transactions
Secured Loan
Temporary Accounts
16. Expenses that remain the same regardless of the circumstances.
Discretionary Income
Fixed Expense
Time Period Assumptions
External Users
17. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Unsecured Loan
Journalizing
Trial balance
Income Statement
18. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Assets
Shareholders
Partnership Agreement
Cost Principle
19. 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
Common Stock
Audit
Expanded Accounting Equation
Sole Proprietorship
20. All purpose journal for recording the debits and credits of transactions and events.
IPO
General Journal
Debtors
Risk
21. A tax deferred account that allows individuals to plan for their retirement.
IPO
IRA (Individual Retirement Account)
Chart of Accounts
Bookkeeping
22. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Partnership
Posting
Contra Account
Deficit
23. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Partnership
Net Income
Balance Column Account
Common Stock
24. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Chart of Accounts
Journal
Unclassified Balance Sheets
Cost Principle
25. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Temporary Accounts
Permanent Accounts
Book Value
Accounting Cycle
26. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
Bookkeeping
Sole Propietorship
Work Sheet
27. Report of changes in equity over a period; adjusted for increases and for decreases.
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28. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Return on Assets
IPO
Reversing Entries
Risk Tolerance
29. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Stock
Managerial Accounting
Book Value
Income Statement
30. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Accounting
Intangible assets
Current Ratio
Ethical Dilemma
31. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Financial Accounting
Matching Principle (or Expense Recognition Principle)
SEC (Securites and Exchange Commision)
Current Assets
32. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Source Documents
Portfolio Income
International Accounting Standards Board
International Financial Reporting Standards
33. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership
Working Papers
Accounting Cycle
Going-concern Assumptions
34. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Book Value
Expenses
Debt Ratio
Shares
35. Happenings that both affect an organization's financial position and can be reliably measured.
Passive Income
Risk Tolerance
Events
Current Liabilities
36. Tool used to show the effects of transactions and events on individual accounts.
T Account
Working Papers
Bookkeeping
Cash Basis Accounting
37. A corporation's basic ownership share.
Working Papers
Source Documents
Common Stock
Owner Investment
38. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Accounting Equation
Matching Principle (or Expense Recognition Principle)
Going-concern Assumptions
CD (Certificate of Deposit)
39. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Shares
Cost-benefit Constraint
Creditors
Corporation
40. Individuals or organizations that owe money.
Sarbanes-Oxley Act (SOX)
Debtors
Balance Column Account
Book Value
41. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Liabilities
Annual Financial Statements
Preferred Stock
Long Term Investments
42. Accounting standards set by the IASB which aim to develop a single set of global standards - to promote those standards - and converge national and international standards globally.
Account Balance
International Financial Reporting Standards
Ponzi Scheme
Interim Financial Statements
43. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Net Income
Financial Accounting
Prepaid Expenses
Accrued Expenses
44. Process of recording transactions in a journal.
Net Loss
Credit
Work Sheet
Journalizing
45. The money left over when income exceeds expenditure.
Ethics
Sole Propietorship
Surplus
Materiality Constraint
46. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Recordkeeping
Ethical Dilemma
Going-concern Assumptions
Posting Reference Column
47. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Assets
IPO
Posting
Ethical Dilemma
48. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Contra Account
Unclassified Balance Sheets
Time Period Assumptions
Going-concern Assumptions
49. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Federal Reserve System
Ponzi Scheme
IPO
Accounting
50. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Accounting Equation
CD (Certificate of Deposit)
Sole Proprietorship
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