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Test your basic knowledge |
DSST Principles Of Finance
Start Test
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.
Time Period Assumptions
Assets
Common Stock
Accrued Revenues
2. List of accounts used by a company' includes and identification number for each account.
Chart of Accounts
Limited Liability Corporation
Internal users
Temporary Accounts
3. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Discretionary Income
Balance Sheet
Interim Financial Statements
Journal
4. Individuals or organizations entitled to receive payments
Limited Liability Corporation
Contra Account
Generally Accepted Accounting Principles
Creditors
5. Tool used to show the effects of transactions and events on individual accounts.
General Journal
Unadjusted Trial Balance
T Account
Current Assets
6. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
Intangible assets
Journalizing
Stock
7. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Owner Withdrawals
Adjusted Trial Balance
Going-concern Assumptions
CD (Certificate of Deposit)
8. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
International Accounting Standards Board
Credit
Straight-line Depreciation Method
Work Sheet
9. Goals that are specific - measurable - attainable - realistic - and time bound.
Unadjusted Trial Balance
SMART Goal
Securities
Closing Entries
10. 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.
Cost Principle
Owner - Capital
Liabilities
Ponzi Scheme
11. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Natural Business Years
Source Documents
Prepaid Expenses
Financial Accounting Standards Board
12. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Time Period Assumptions
Book Value
Monetary Unit Assumption
Statement of Owner's Equity
13. 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.
Adjusting Entry
Revenues
Unsecured Loan
Expanded Accounting Equation
14. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Securities
Return on Assets
Surplus
Income Statement
15. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Natural Business Years
Annual Financial Statements
Unsecured Loan
SEC (Securites and Exchange Commision)
16. 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.
International Financial Reporting Standards
Audit
Return
Sole Proprietorship
17. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Account
Internal transactions
Stockholders
Profit Margin
18. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Permanent Accounts
Trial balance
Profit Margin
Unsecured Loan
19. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Adjusting Entry
Partnership
Full Disclosure Principle
Reversing Entries
20. Owners of a corporation who usually receive dividends. Also called stockholders.
Profit Margin
Return on Assets
Shareholders
Contra Account
21. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Risk
Acquisition
Owner Withdrawals
Operating Cycle
22. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Posting
Partnership Agreement
Partnership
Revenues
23. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Risk Tolerance
International Accounting Standards Board
Accounting Equation
Matching Principle (or Expense Recognition Principle)
24. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Corporations
Double Entry Accounting
Sole Proprietorship
Plant Assets
25. Happenings that both affect an organization's financial position and can be reliably measured.
Stock
Stockholders
Events
Unsecured Loan
26. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
General Journal
Revenues
Equity
Long Term Liabilities
27. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Generally Accepted Accounting Principles
Owner Investment
Ethics
Shares
28. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Fiscal Year
Managerial Accounting
Balance Column Account
Limited Liability Corporation
29. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
CD (Certificate of Deposit)
NASDAQ
Limited Liability Corporation
Reversing Entries
30. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Return
Securities and Exchange Commission
Secured Loan
Operating Cycle
31. Items paid for in advance of receiving their benefits. Classified as assets.
Posting Reference Column
Prepaid Expenses
Journal
Risk
32. The first time a company sells shares of its stock to the public.
Stock
Internal transactions
Accounting Equation
IPO
33. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accounting
Limited Liability Corporation
Closing Entries
Going-concern Assumptions
34. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Straight-line Depreciation Method
Passive Income
Annual Financial Statements
Acquisition
35. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Reversing Entries
Partnership Agreement
Stock
Accrual Basis Accounting
36. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Unadjusted Trial Balance
Posting
Permanent Accounts
Conceptual Framework
37. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Current Assets
Accounting Cycle
Equity
Corporation
38. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Balance Sheet
Unadjusted Trial Balance
Accrual Basis Accounting
Secured Loan
39. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Mergers
SMART Goal
Going-concern Assumptions
Balance Column Account
40. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Events
Accrual Basis Accounting
Profit Margin
Annual Financial Statements
41. Income from investments - including dividends - interest - or the sale of a property.
Corporations
Portfolio Income
Partnership Agreement
Balance Column Account
42. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Recordkeeping
Credit
Permanent Accounts
Sole Propietorship
43. 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
Adjusting Entry
Sarbanes-Oxley Act (SOX)
Accounting Period
Matching Principle (or Expense Recognition Principle)
44. 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
Net Loss
Internal users
Preferred Stock
Portfolio Income
45. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Adjusted Trial Balance
Unearned Revenue
Temporary Accounts
Securities and Exchange Commission
46. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Plant Assets
Passive Income
Ponzi Scheme
Portfolio Income
47. Area of accounting aimed mainly at serving external users.
Owner - Capital
Financial Accounting
Account Balance
Matching Principle (or Expense Recognition Principle)
48. Length of time covered by financial statements; also called reporting period.
Accounting Period
Generally Accepted Accounting Principles
Unsecured Loan
Expanded Accounting Equation
49. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Sole Propietorship
Owner Investment
Corporations
50. Difference between total debits and total credits (including the beginning balance) for an account.
Federal Reserve System
Sole Proprietorship
Account Balance
Accrued Expenses