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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. Individuals or organizations entitled to receive payments
Creditors
Book Value
Classified Balance Sheet
Closing process
2. Outflows or using up of assets as part of operations of business to generate sales.
Financial Accounting
Expenses
Return
Balance Column Account
3. The combining of two or more comapnies into one larger company.
Varaiable Expense
Mergers
Sarbanes-Oxley Act (SOX)
Journalizing
4. Gross increase in equity from a company's business activities that earn income.
Straight-line Depreciation Method
Federal Reserve System
Portfolio Income
Revenues
5. A loan that is backed by collateral such as cars - houses - or other assets.
Current Ratio
Statement of Cash Flows
Interim Financial Statements
Secured Loan
6. 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
Adjusted Trial Balance
Expanded Accounting Equation
Liabilities
Corporation
7. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Income Summary
Time Period Assumptions
Interim Financial Statements
Federal Reserve System
8. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Temporary Accounts
Double Entry Accounting
Accrued Expenses
Adjusted Trial Balance
9. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Profit Margin
Closing Entries
Cost-benefit Constraint
Corporation
10. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Return
Present Value
Profit Margin
Going-concern Assumptions
11. Revenues earned in a period that both unrecorded and not yet received in cash (or other assets; adjusting entries for recording accrued revenues involve increasing assets and increasing revenues.
Balance Sheet
Accrued Revenues
Money Market Account
Working Papers
12. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Accounting Cycle
Assets
Partnership
Equity
13. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
International Financial Reporting Standards
Trial balance
Current Liabilities
Pro Forma Financial Statement
14. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Materiality Constraint
Cost-benefit Constraint
NYSE (New York Stock Exchange)
Creditors
15. Area of accounting aimed mainly at serving external users.
Pro Forma Financial Statement
Reversing Entries
Financial Accounting
Internal users
16. The money left over when income exceeds expenditure.
Annual Financial Statements
Accounting Cycle
Surplus
Full Disclosure Principle
17. 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
Unclassified Balance Sheets
Accounting Equation
Sarbanes-Oxley Act (SOX)
NASDAQ
18. Business owned by a single person.
Account Balance
Sole Propietorship
Limited Liability Corporation
Fiscal Year
19. Owners of a corporation who usually receive dividends. Also called stockholders.
Income Statement
Shareholders
General Journal
Expense Recognition Principle
20. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Owner Withdrawals
Materiality Constraint
Accrued Revenues
Work Sheet
21. Rules that specify acceptable accounting practices.
Long Term Liabilities
Posting Reference Column
Generally Accepted Accounting Principles
Net Loss
22. Goals that are specific - measurable - attainable - realistic - and time bound.
SMART Goal
Deficit
Matching Principle (or Expense Recognition Principle)
Balance Column Account
23. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Risk
Risk Tolerance
Materiality Constraint
Balance Sheet
24. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Interim Financial Statements
Closing Entries
Accounting Equation
Intangible assets
25. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Securities
Straight-line Depreciation Method
Recordkeeping
Cost Principle
26. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Ponzi Scheme
Time Period Assumptions
Accounting
Passive Income
27. Report of changes in equity over a period; adjusted for increases and for decreases.
28. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Chart of Accounts
IPO
Partnership Agreement
Adjusted Trial Balance
29. An expense that changes from period to perio - such as food or gasoline costs.
Varaiable Expense
Journalizing
CD (Certificate of Deposit)
Preferred Stock
30. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Assets
Securities
Accounting Period
Deficit
31. 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.
Bailout
Stock
Ponzi Scheme
Reversing Entries
32. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Business Entity Assumption
Partnership
Audit
Debt Ratio
33. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
External Users
Sole Proprietorship
Owner Investment
Balance Column Account
34. Exchanges of economic value between one entity and another entity.
External Transactions
Secured Loan
Accrued Expenses
Owner Investment
35. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Working Papers
Going-concern Assumptions
Income Summary
Debtors
36. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Classified Balance Sheet
IRA (Individual Retirement Account)
Pro Forma Financial Statement
Risk
37. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Balance Sheet
Compound Journal Entries
Acquisition
Recordkeeping
38. Happenings that both affect an organization's financial position and can be reliably measured.
Accrual Basis Accounting
Cost Principle
Events
Accounting Equation
39. List of accounts used by a company' includes and identification number for each account.
Chart of Accounts
Liabilities
Credit
Bailout
40. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Reversing Entries
Financial Accounting Standards Board
Managerial Accounting
Generally Accepted Accounting Principles
41. Difference between total debits and total credits (including the beginning balance) for an account.
Permanent Accounts
Account Balance
Present Value
Going-concern Assumptions
42. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Ponzi Scheme
SMART Goal
Unadjusted Trial Balance
Straight-line Depreciation Method
43. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenue
Permanent Accounts
Cost Principle
Sole Proprietorship
44. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Depreciation
Matching Principle (or Expense Recognition Principle)
Shareholders
Income Summary
45. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
IPO
Conceptual Framework
Permanent Accounts
Recordkeeping
46. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Secured Loan
Adjusted Trial Balance
Income Summary
Temporary Accounts
47. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting Reference Column
Risk
Creditors
Surplus
48. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Sole Proprietorship
Ethics
Net Loss
Long Term Investments
49. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
International Accounting Standards Board
CD (Certificate of Deposit)
Revenues
Audit
50. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Accrued Expenses
Classified Balance Sheet
IRA (Individual Retirement Account)
Passive Income