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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. 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.






2. Business owned by a single person.






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






4. Business owned by one person that is not organized as a corporation.






5. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.






6. Entries recorded at the end of each accounting period to transfer end of period balances in revenue - gain - expense - loss - and withdrawal (dividend for a corporation) accounts to the capital account (to retain earnings for a corporation).






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






8. 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.






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






10. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.






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






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






13. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.






14. Income from investments - including dividends - interest - or the sale of a property.






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






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






17. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)






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






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






20. 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.






21. Amount earned after subtracting all expenses necessary for and matched with sales for a period.






22. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.






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






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






25. The money left over when income exceeds expenditure.






26. Persons using accounting information who are directly involved in managing the organization.






27. The twelve month period that ends when a company's sales activities are at their lowest point.






28. Normal time between paying cash for merchandise or employee services and receiving cash from customers.






29. Business owned by two or more people.






30. A legal entity that is seperate from its owners.






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






32. 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






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






34. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.






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






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






37. An expense that changes from period to perio - such as food or gasoline costs.






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






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






40. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.






41. Balance sheet that broadly groups assets - liabilities - and equity accounts.






42. Statements that show the effect of proposed transactions and events as if they had occurred.






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






44. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.






45. Individuals or organizations entitled to receive payments






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






47. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.






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






49. Principle that assumes transactions and events can be expressed in money units.






50. Income that is available after all of the essential financial commitments have been paid.