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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. 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.
NYSE (New York Stock Exchange)
Expense Recognition Principle
Profit Margin
Owner Withdrawals
2. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Shares
Time Period Assumptions
Shareholders
Ethics
3. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Accounting Equation
Double Entry Accounting
Adjusting Entry
Unsecured Loan
4. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Recordkeeping
Straight-line Depreciation Method
Reversing Entries
5. The combining of two or more comapnies into one larger company.
Accrual Basis Accounting
Ponzi Scheme
Classified Balance Sheet
Mergers
6. Persons using accounting information who are not directly involved in running the organization.
Accrued Revenues
Sole Propietorship
Common Stock
External Users
7. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Materiality Constraint
Accounting
Expense Recognition Principle
Balance Sheet
8. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Owner Withdrawals
Current Ratio
Posting Reference Column
Cash Basis Accounting
9. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Varaiable Expense
Working Papers
Work Sheet
T Account
10. Loaning or giving money to a business in orer to save it from bankruptcy.
Time Period Assumptions
Time Period Assumptions
Bailout
Audit
11. Individuals or organizations that owe money.
Debtors
Internal users
Current Ratio
Expanded Accounting Equation
12. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Debt Ratio
Compound Journal Entries
Owner Investment
Limited Liability Corporation
13. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Going-concern Assumptions
Debit
Ledger
Recordkeeping
14. Uncertainty about expected return.
SEC (Securites and Exchange Commision)
Risk
Post Closing Trial Balance
Present Value
15. A security representing a share of ownership in a company - providing voting rights - and entitling the holer to a share of the company's success through dividends and/or capital appreciation.
Account
Sarbanes-Oxley Act (SOX)
Temporary Accounts
Common Stock
16. Journal entries that affect at least three accounts.
Compound Journal Entries
Adjusted Trial Balance
External Transactions
Assets
17. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Temporary Accounts
Financial Accounting Standards Board
Balance Sheet
Contra Account
18. The first time a company sells shares of its stock to the public.
Accounting Equation
Portfolio Income
Expanded Accounting Equation
IPO
19. A corporation's basic ownership share.
Interim Financial Statements
Partnership Agreement
Ethical Dilemma
Common Stock
20. Report of changes in equity over a period; adjusted for increases and for decreases.
21. 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
Sarbanes-Oxley Act (SOX)
IPO
Journal
Recordkeeping
22. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Cost Principle
Posting Reference Column
Net Income
Fiscal Year
23. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Equity
Double Entry Accounting
Money Market Account
Deficit
24. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Balance Column Account
Account
Money Market Account
Preferred Stock
25. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Matching Principle (or Expense Recognition Principle)
Debt Ratio
Bonds
Managerial Accounting
26. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Revenues
Profit Margin
Income Statement
Secured Loan
27. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
CD (Certificate of Deposit)
Events
Varaiable Expense
Financial Accounting
28. Process of recording transactions in a journal.
Varaiable Expense
Statement of Cash Flows
Journalizing
CD (Certificate of Deposit)
29. 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
Preferred Stock
Revenue Recognition Principle
Ethics
Matching Principle
30. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Sole Propietorship
Income Summary
Book Value
Reversing Entries
31. Business owned by two or more people.
Book Value
Accrued Expenses
Partnership
IPO
32. Tool used to show the effects of transactions and events on individual accounts.
Accounting Cycle
Return
Shareholders
T Account
33. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Balance Sheet
Current Ratio
Temporary Accounts
Compound Journal Entries
34. The principle prescribing that revenue is recognized when earned.
Debt Ratio
Interim Financial Statements
Full Disclosure Principle
Revenue Recognition Principle
35. Business owned by one person that is not organized as a corporation.
Federal Reserve System
Book Value
Ponzi Scheme
Sole Proprietorship
36. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Assets
Unclassified Balance Sheets
Straight-line Depreciation Method
Fixed Expense
37. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Expense Recognition Principle
Shares
Materiality Constraint
Current Ratio
38. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Return on Assets
Sole Propietorship
Ethical Dilemma
Trial balance
39. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Owner - Capital
Ethical Dilemma
Work Sheet
Common Stock
40. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Securities and Exchange Commission
Monetary Unit Assumption
Owner Withdrawals
Classified Balance Sheet
41. Business owned by a single person.
Income Summary
Reversing Entries
SMART Goal
Sole Propietorship
42. Difference between total debits and total credits (including the beginning balance) for an account.
Temporary Accounts
Sole Proprietorship
Debit
Account Balance
43. A tax deferred account that allows individuals to plan for their retirement.
IRA (Individual Retirement Account)
Accounting
Stockholders
Journalizing
44. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Corporation
Classified Balance Sheet
Plant Assets
International Financial Reporting Standards
45. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Debt Ratio
Contra Account
Sole Propietorship
Classified Balance Sheet
46. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Managerial Accounting
Internal users
Risk Tolerance
Operating Cycle
47. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Cost Principle
Going-concern Assumptions
Accounting Period
Money Market Account
48. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Discretionary Income
External Users
Bailout
Credit
49. 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.
Limited Liability Corporation
NYSE (New York Stock Exchange)
Going-concern Assumptions
Interim Financial Statements
50. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
IPO
NASDAQ
Income Summary
Accrued Expenses