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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. Persons using accounting information who are directly involved in managing the organization.
Internal users
Cash Basis Accounting
Pro Forma Financial Statement
Current Liabilities
2. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Current Ratio
Accounting Cycle
Contra Account
3. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Long Term Liabilities
NASDAQ
Prepaid Expenses
Sole Proprietorship
4. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Income Summary
Work Sheet
Return
Contra Account
5. Independent group of full-time members responsible for setting accounting rules.
Recordkeeping
Financial Accounting Standards Board
Fiscal Year
Classified Balance Sheet
6. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Risk Tolerance
Reversing Entries
Account
Discretionary Income
7. Income from investments - including dividends - interest - or the sale of a property.
Post Closing Trial Balance
Adjusted Trial Balance
Debt Ratio
Portfolio Income
8. A corporation's basic ownership share.
Common Stock
Unsecured Loan
Statement of Owner's Equity
Journal
9. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Adjusted Trial Balance
Bonds
Assets
Stock
10. 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.
Full Disclosure Principle
Owner - Capital
Business Entity Assumption
Present Value
11. Assets pulled out of the business by the owner.
Ethical Dilemma
Owner Withdrawals
Current Assets
Statement of Owner's Equity
12. Tool used to show the effects of transactions and events on individual accounts.
Long Term Investments
T Account
CD (Certificate of Deposit)
Debt Ratio
13. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Monetary Unit Assumption
Balance Sheet
Net Loss
Owner Investment
14. 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.
Adjusted Trial Balance
Securities
CD (Certificate of Deposit)
Liabilities
15. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Cost-benefit Constraint
Journal
Journalizing
Accounting
16. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Work Sheet
Straight-line Depreciation Method
Current Assets
Business Entity Assumption
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
NASDAQ
Annual Financial Statements
Common Stock
Time Period Assumptions
18. A loan that is backed by collateral such as cars - houses - or other assets.
Secured Loan
General Journal
Shareholders
CD (Certificate of Deposit)
19. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Common Stock
Accrual Basis Accounting
Natural Business Years
Audit
20. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Book Value
Unclassified Balance Sheets
Operating Cycle
Balance Column Account
21. List of accounts used by a company' includes and identification number for each account.
Money Market Account
Posting
Accounting Period
Chart of Accounts
22. Gross increase in equity from a company's business activities that earn income.
Sole Propietorship
Revenues
Corporations
Fixed Expense
23. Prescribes expenses to be reported in the same period as the revenues that were eared as a result of the expenses. Also called the Expense Recognition Principle.
Matching Principle
Adjusted Trial Balance
Debit
Discretionary Income
24. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Working Papers
Source Documents
Internal transactions
Unearned Revenue
25. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Accrued Revenues
Passive Income
Present Value
Posting
26. Difference between total debits and total credits (including the beginning balance) for an account.
Plant Assets
Common Stock
Account Balance
IRA (Individual Retirement Account)
27. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Sole Propietorship
Closing process
Federal Reserve System
Unclassified Balance Sheets
28. Individuals or organizations that owe money.
Debtors
Accrued Revenues
Profit Margin
Time Period Assumptions
29. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
International Financial Reporting Standards
Statement of Cash Flows
Partnership Agreement
Bailout
30. 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
Financial Accounting
Stock
Journalizing
Expanded Accounting Equation
31. Business owned by two or more people.
Partnership
Auditors
Liabilities
Preferred Stock
32. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
NYSE (New York Stock Exchange)
Temporary Accounts
Reversing Entries
Corporation
33. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Account
Balance Sheet
Prepaid Expenses
Income Summary
34. The value of a future cash steam discounted at the appropriate market interest rate.
Common Stock
Securities and Exchange Commission
Present Value
Managerial Accounting
35. Persons using accounting information who are not directly involved in running the organization.
External Users
Going-concern Assumptions
Partnership Agreement
Revenue Recognition Principle
36. Owners of a corporation who usually receive dividends. Also called shareholders.
Book Value
Unadjusted Trial Balance
Unclassified Balance Sheets
Stockholders
37. Financial statement that subtracts expenses from revenues to yield a net income or loss over a specified period of time; also includes any gains or losses.
Income Statement
Corporations
Trial balance
Cost-benefit Constraint
38. Report of changes in equity over a period; adjusted for increases and for decreases.
39. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Partnership
Materiality Constraint
Financial Accounting
Expense Recognition Principle
40. 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.
Internal users
Post Closing Trial Balance
Federal Reserve System
Annual Financial Statements
41. Journal entries that affect at least three accounts.
Compound Journal Entries
Annual Financial Statements
Stock
Matching Principle (or Expense Recognition Principle)
42. Owners of a corporation who usually receive dividends. Also called stockholders.
Journalizing
Corporations
Shareholders
Securities
43. The combining of two or more comapnies into one larger company.
Mergers
External Transactions
Permanent Accounts
Expanded Accounting Equation
44. Monies (or sums of money) received from an investment; often in percent form.
Closing Entries
Present Value
Return
Owner - Capital
45. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Ethics
Closing Entries
Net Income
Journal
46. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Fiscal Year
Accounting
Surplus
Statement of Cash Flows
47. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Securities
Liabilities
Ethical Dilemma
Return on Assets
48. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Risk Tolerance
Trial balance
Expense Recognition Principle
Net Loss
49. Loaning or giving money to a business in orer to save it from bankruptcy.
T Account
Bailout
Debt Ratio
Working Papers
50. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Pro Forma Financial Statement
Stockholders
Sarbanes-Oxley Act (SOX)
Return on Assets