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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 assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Depreciation
Business Entity Assumption
Owner - Capital
2. 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.
External Users
Annual Financial Statements
Federal Reserve System
Prepaid Expenses
3. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Financial Accounting Standards Board
Ethical Dilemma
Unsecured Loan
Audit
4. Owners of a corporation who usually receive dividends. Also called stockholders.
Expenses
NASDAQ
Shareholders
Discretionary Income
5. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Sole Proprietorship
Bookkeeping
Closing process
Managerial Accounting
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).
Recordkeeping
Owner Investment
Financial Accounting Standards Board
Closing Entries
7. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Managerial Accounting
Accounting
Sole Proprietorship
Ethics
8. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Accounting
Accrual Basis Accounting
CD (Certificate of Deposit)
Current Assets
9. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Posting
Shareholders
Fixed Expense
Credit
10. 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).
Credit
Monetary Unit Assumption
Varaiable Expense
Income Summary
11. Process of recording transactions in a journal.
Liabilities
Journalizing
Return on Assets
Permanent Accounts
12. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Net Income
Going-concern Assumptions
Time Period Assumptions
Revenue Recognition Principle
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.
Account Balance
Ponzi Scheme
Cost-benefit Constraint
NASDAQ
14. 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.
Acquisition
Internal users
Expense Recognition Principle
Source Documents
15. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Stock
Working Papers
Accrual Basis Accounting
Balance Sheet
16. 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
Equity
Passive Income
Balance Column Account
17. Uncertainty about expected return.
Book Value
Working Papers
Risk
Expense Recognition Principle
18. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Liabilities
Business Entity Assumption
Depreciation
Generally Accepted Accounting Principles
19. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Common Stock
Securities
Time Period Assumptions
Risk
20. Report of changes in equity over a period; adjusted for increases and for decreases.
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21. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Ponzi Scheme
Accrued Revenues
Reversing Entries
Unearned Revenue
22. 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
Expanded Accounting Equation
Matching Principle (or Expense Recognition Principle)
Ethics
Business Entity Assumption
23. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Fiscal Year
Corporation
Classified Balance Sheet
Owner Investment
24. Assets put into the business by the owner.
Bookkeeping
Risk Tolerance
Surplus
Owner Investment
25. 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
Balance Column Account
Common Stock
SEC (Securites and Exchange Commision)
26. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Contra Account
Working Papers
Common Stock
Cost-benefit Constraint
27. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Statement of Owner's Equity
Return
Double Entry Accounting
Risk Tolerance
28. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Adjusted Trial Balance
Statement of Cash Flows
Accounting Cycle
Risk Tolerance
29. A corporation's basic ownership share.
Recordkeeping
Common Stock
Current Liabilities
Working Papers
30. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Return
Unearned Revenues
Straight-line Depreciation Method
Bookkeeping
31. Gross increase in equity from a company's business activities that earn income.
Credit
Cash Basis Accounting
Revenues
Trial balance
32. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Monetary Unit Assumption
Deficit
Cost Principle
Straight-line Depreciation Method
33. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Owner - Capital
Time Period Assumptions
Monetary Unit Assumption
Debt Ratio
34. 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.
Long Term Investments
Discretionary Income
Post Closing Trial Balance
Bonds
35. The combining of two or more comapnies into one larger company.
Internal users
Mergers
Unclassified Balance Sheets
Shareholders
36. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Measurement Principle
Statement of Cash Flows
Depreciation
Cost-benefit Constraint
37. The money left over when income exceeds expenditure.
Surplus
Intangible assets
Materiality Constraint
Book Value
38. Owners of a corporation who usually receive dividends. Also called shareholders.
Balance Column Account
Post Closing Trial Balance
Time Period Assumptions
Stockholders
39. Persons using accounting information who are directly involved in managing the organization.
Internal users
Going-concern Assumptions
Corporation
Posting Reference Column
40. Items paid for in advance of receiving their benefits. Classified as assets.
Income Statement
Internal users
Prepaid Expenses
Audit
41. Assets pulled out of the business by the owner.
Cost Principle
Bonds
Profit Margin
Owner Withdrawals
42. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Portfolio Income
Going-concern Assumptions
Plant Assets
Debit
43. The principle prescribing that revenue is recognized when earned.
Revenue Recognition Principle
Conceptual Framework
Adjusted Trial Balance
Securities and Exchange Commission
44. Record containing all accounts (with amounts) for a business.
Common Stock
Financial Accounting
Ledger
Accrued Revenues
45. The value of a future cash steam discounted at the appropriate market interest rate.
Temporary Accounts
Compound Journal Entries
Present Value
Unadjusted Trial Balance
46. The NYSE was founded in 1792 and is the oldest and larvest securities market in the United States. it is located on Wall Street in New York.
Expanded Accounting Equation
NYSE (New York Stock Exchange)
Net Loss
Compound Journal Entries
47. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Return
Internal users
Partnership Agreement
Operating Cycle
48. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Reversing Entries
Posting
External Users
Unadjusted Trial Balance
49. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Permanent Accounts
General Journal
Long Term Investments
Work Sheet
50. Loaning or giving money to a business in orer to save it from bankruptcy.
Auditors
Bailout
SMART Goal
Debit