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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. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.






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






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






4. Journal entries that affect at least three accounts.






5. The principle prescribing that revenue is recognized when earned.






6. Persons using accounting information who are not directly involved in running the organization.






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






8. A written framework to guide the development - preparation - and interpretation of financial accounting information.






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






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






11. A corporation's basic ownership share.






12. The money left over when income exceeds expenditure.






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






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






15. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.






16. Expenses that remain the same regardless of the circumstances.






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






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






19. An acronym for the National Association of Securities Dealers Automated Quotations. NASDAQ was founded in 1970 and is the largest electronic stock exchange in the United States. Unlike the NYSE - it has no physical location - existing entirely on cyb






20. Exchanges of economic value between one entity and another entity.






21. 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.






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






23. 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).






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






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






26. 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






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






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






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






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






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






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. Accounting information is based on cost with potential subsequent adjustments to fair value.






34. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.






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






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






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






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






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






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






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






42. Process of recording transactions in a journal.






43. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.






44. 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.






45. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.






46. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.






47. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).






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






49. 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.






50. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.