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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. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Ledger
Full Disclosure Principle
Bailout
Credit
2. Goals that are specific - measurable - attainable - realistic - and time bound.
SMART Goal
Balance Sheet
Double Entry Accounting
External Users
3. Individuals hired to review financial reports and information systems of organizations.
Owner - Capital
Accounting Cycle
Auditors
SEC (Securites and Exchange Commision)
4. List of accounts used by a company' includes and identification number for each account.
Sole Propietorship
Balance Sheet
Chart of Accounts
Present Value
5. Tool used to show the effects of transactions and events on individual accounts.
T Account
Current Ratio
External Users
Pro Forma Financial Statement
6. Area of accounting aimed mainly at serving external users.
Financial Accounting
Expanded Accounting Equation
Net Loss
Source Documents
7. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Bookkeeping
Matching Principle (or Expense Recognition Principle)
Unadjusted Trial Balance
Temporary Accounts
8. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
NYSE (New York Stock Exchange)
Journalizing
Account Balance
9. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Profit Margin
Accrual Basis Accounting
Accounting Period
Trial balance
10. The value of a future cash steam discounted at the appropriate market interest rate.
Measurement Principle
Present Value
External Users
Posting
11. 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.
Balance Column Account
Owner - Capital
Matching Principle
Limited Liability Corporation
12. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Posting Reference Column
Accounting Equation
Compound Journal Entries
Corporations
13. 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
Common Stock
NYSE (New York Stock Exchange)
Plant Assets
14. Items paid for in advance of receiving their benefits. Classified as assets.
Prepaid Expenses
Varaiable Expense
Long Term Investments
Credit
15. Owners of a corporation who usually receive dividends. Also called shareholders.
Financial Accounting Standards Board
Stockholders
Unsecured Loan
Pro Forma Financial Statement
16. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
Accounting Cycle
Depreciation
Present Value
17. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accrued Expenses
Financial Accounting Standards Board
T Account
Accounting
18. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
IPO
Discretionary Income
Assets
Long Term Investments
19. 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
General Journal
Full Disclosure Principle
Shares
20. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Cost-benefit Constraint
Securities and Exchange Commission
Unsecured Loan
Temporary Accounts
21. Uncertainty about expected return.
Matching Principle (or Expense Recognition Principle)
Risk
Posting
Unadjusted Trial Balance
22. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Corporation
Portfolio Income
Full Disclosure Principle
Partnership Agreement
23. Income from investments - including dividends - interest - or the sale of a property.
Financial Accounting Standards Board
Accounting Equation
Portfolio Income
Debtors
24. Business owned by two or more people.
Partnership Agreement
Ponzi Scheme
Owner Investment
Partnership
25. Create the Public Company Accounting Oversight Board - regulates analyst conflicts - imposes corporate governance requirements - enhances accounting and control disclosures - impacts insider transactions and executive loans - establishes new types of
Trial balance
Straight-line Depreciation Method
Sarbanes-Oxley Act (SOX)
Revenue Recognition Principle
26. Individuals or organizations that owe money.
Auditors
Revenue Recognition Principle
Debtors
Chart of Accounts
27. Gross increase in equity from a company's business activities that earn income.
Present Value
Money Market Account
Accounting Cycle
Revenues
28. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Owner Withdrawals
Shareholders
Balance Column Account
Current Assets
29. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Money Market Account
Net Income
Expenses
Straight-line Depreciation Method
30. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Business Entity Assumption
Reversing Entries
Risk Tolerance
External Users
31. Happenings that both affect an organization's financial position and can be reliably measured.
Monetary Unit Assumption
Unearned Revenues
Events
Book Value
32. 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.
Partnership
Liabilities
Sole Proprietorship
Adjusted Trial Balance
33. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Straight-line Depreciation Method
International Accounting Standards Board
Time Period Assumptions
Fiscal Year
34. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Compound Journal Entries
Journal
Statement of Cash Flows
Preferred Stock
35. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Current Ratio
Unearned Revenues
Statement of Cash Flows
Prepaid Expenses
36. Business owned by a single person.
Accrued Expenses
Expanded Accounting Equation
Sole Propietorship
General Journal
37. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Going-concern Assumptions
Unearned Revenue
Fiscal Year
Long Term Liabilities
38. Owners of a corporation who usually receive dividends. Also called stockholders.
Owner - Capital
Shareholders
Partnership Agreement
Sole Propietorship
39. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Accrual Basis Accounting
Corporations
Source Documents
CD (Certificate of Deposit)
40. 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
Business Entity Assumption
Bailout
Current Liabilities
41. 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.
SEC (Securites and Exchange Commision)
Business Entity Assumption
International Financial Reporting Standards
Reversing Entries
42. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Shareholders
Account
Fixed Expense
Expenses
43. The money left over when income exceeds expenditure.
T Account
Surplus
Return on Assets
Unclassified Balance Sheets
44. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Accounting Period
Depreciation
Expanded Accounting Equation
Creditors
45. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Matching Principle (or Expense Recognition Principle)
Classified Balance Sheet
Acquisition
Account Balance
46. Temporary account used only in the closing process to which the balances of revenue and expense accounts (including any gains or losses) are transferred. Its balance is transferred to the capital account (or retained earnings for a corporation).
NASDAQ
Annual Financial Statements
Income Summary
Acquisition
47. 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.
Going-concern Assumptions
Expenses
Journal
Federal Reserve System
48. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Money Market Account
Federal Reserve System
Expense Recognition Principle
49. Report of changes in equity over a period; adjusted for increases and for decreases.
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50. Assets put into the business by the owner.
Owner Investment
Unsecured Loan
Cost-benefit Constraint
Operating Cycle