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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. Activities within an organization that can affect the accounting equation.
Current Liabilities
Posting
NASDAQ
Internal transactions
2. The money left over when income exceeds expenditure.
Surplus
Auditors
Varaiable Expense
Compound Journal Entries
3. Difference between total debits and total credits (including the beginning balance) for an account.
SEC (Securites and Exchange Commision)
Statement of Cash Flows
Account Balance
Sole Propietorship
4. The twelve month period that ends when a company's sales activities are at their lowest point.
Credit
Measurement Principle
Statement of Owner's Equity
Natural Business Years
5. All purpose journal for recording the debits and credits of transactions and events.
Bonds
Portfolio Income
General Journal
Matching Principle
6. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Matching Principle (or Expense Recognition Principle)
Reversing Entries
Deficit
Going-concern Assumptions
7. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Annual Financial Statements
Revenue Recognition Principle
Cost-benefit Constraint
Journal
8. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Federal Reserve System
Going-concern Assumptions
Double Entry Accounting
Net Loss
9. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Balance Column Account
Current Liabilities
Bookkeeping
Intangible assets
10. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Depreciation
Secured Loan
Time Period Assumptions
Account
11. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Conceptual Framework
Unearned Revenues
Internal transactions
Time Period Assumptions
12. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Present Value
Permanent Accounts
Owner - Capital
Credit
13. Rules that specify acceptable accounting practices.
Common Stock
Ponzi Scheme
Natural Business Years
Generally Accepted Accounting Principles
14. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Journal
Corporation
Net Income
Credit
15. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Present Value
Revenue Recognition Principle
Stockholders
Accounting Cycle
16. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Income Statement
Conceptual Framework
Credit
NYSE (New York Stock Exchange)
17. Length of time covered by financial statements; also called reporting period.
Net Income
Statement of Owner's Equity
Accrued Expenses
Accounting Period
18. Process of recording transactions in a journal.
Ethics
Journalizing
Auditors
Profit Margin
19. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Full Disclosure Principle
Account Balance
Book Value
Present Value
20. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Financial Accounting Standards Board
Return
Assets
Accrual Basis Accounting
21. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Double Entry Accounting
Closing process
Working Papers
Creditors
22. 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.
Equity
Owner - Capital
Income Statement
Debit
23. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Revenues
Monetary Unit Assumption
Income Statement
Accounting Equation
24. Happenings that both affect an organization's financial position and can be reliably measured.
Time Period Assumptions
Surplus
Events
Intangible assets
25. Loaning or giving money to a business in orer to save it from bankruptcy.
Reversing Entries
Financial Accounting Standards Board
Journal
Bailout
26. Tool used to show the effects of transactions and events on individual accounts.
Profit Margin
T Account
Natural Business Years
Partnership
27. Report of changes in equity over a period; adjusted for increases and for decreases.
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28. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Trial balance
Portfolio Income
Ledger
Intangible assets
29. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Owner - Capital
Ethics
T Account
Straight-line Depreciation Method
30. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Ethics
Book Value
Accounting Cycle
Shareholders
31. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Recordkeeping
Mergers
Long Term Investments
Cost Principle
32. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Unearned Revenue
Working Papers
Accrued Revenues
Partnership Agreement
33. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Post Closing Trial Balance
Source Documents
Secured Loan
Revenues
34. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Accounting Equation
Unclassified Balance Sheets
Closing Entries
Corporation
35. 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
Depreciation
Expanded Accounting Equation
Recordkeeping
Common Stock
36. Owner's claim on the assets of a business; equals the residual interest in an entity's assets after deducting liabilities. Also called net assets.
Unearned Revenue
Current Assets
Revenue Recognition Principle
Equity
37. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Deficit
General Journal
Shares
Audit
38. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Corporations
Recordkeeping
Business Entity Assumption
Shares
39. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Passive Income
Interim Financial Statements
Profit Margin
Double Entry Accounting
40. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Securities
Deficit
Income Summary
Work Sheet
41. List of accounts used by a company' includes and identification number for each account.
Balance Column Account
Net Income
CD (Certificate of Deposit)
Chart of Accounts
42. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Owner Investment
Creditors
Source Documents
Current Ratio
43. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Current Liabilities
External Users
Partnership
Reversing Entries
44. Principle that assumes transactions and events can be expressed in money units.
Prepaid Expenses
Current Liabilities
Monetary Unit Assumption
Cost Principle
45. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Net Loss
Liabilities
Creditors
Posting Reference Column
46. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
CD (Certificate of Deposit)
Money Market Account
Assets
Accounting Equation
47. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Financial Accounting Standards Board
Passive Income
Partnership Agreement
Journalizing
48. 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.
Risk Tolerance
NYSE (New York Stock Exchange)
External Transactions
Pro Forma Financial Statement
49. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Accrual Basis Accounting
Managerial Accounting
Unearned Revenues
Business Entity Assumption
50. 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
Business Entity Assumption
Closing process
Expenses