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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. 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.
Financial Accounting Standards Board
Deficit
Bookkeeping
Adjusting Entry
2. Expenses that remain the same regardless of the circumstances.
Unearned Revenues
Fixed Expense
Mergers
Deficit
3. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern Assumptions
Accounting Period
Net Income
Accounting
4. The combining of two or more comapnies into one larger company.
Mergers
Owner - Capital
T Account
Post Closing Trial Balance
5. Individuals or organizations entitled to receive payments
Recordkeeping
Unearned Revenue
Creditors
Common Stock
6. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Monetary Unit Assumption
Statement of Cash Flows
Closing Entries
External Transactions
7. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Acquisition
Journal
Work Sheet
Natural Business Years
8. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Account Balance
Post Closing Trial Balance
Unearned Revenues
Measurement Principle
9. Monies (or sums of money) received from an investment; often in percent form.
Return
Matching Principle (or Expense Recognition Principle)
Classified Balance Sheet
Passive Income
10. 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.
SEC (Securites and Exchange Commision)
Accounting Period
Posting
Accrued Revenues
11. Loaning or giving money to a business in orer to save it from bankruptcy.
Annual Financial Statements
Bailout
T Account
Matching Principle
12. 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.
Measurement Principle
CD (Certificate of Deposit)
Liabilities
Corporation
13. A legal entity that is seperate from its owners.
Corporations
Revenues
Revenue Recognition Principle
Full Disclosure Principle
14. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Cash Basis Accounting
Time Period Assumptions
Account
Depreciation
15. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
External Users
Portfolio Income
Creditors
Fiscal Year
16. Individuals hired to review financial reports and information systems of organizations.
Auditors
Adjusted Trial Balance
Varaiable Expense
Net Income
17. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Operating Cycle
IRA (Individual Retirement Account)
Conceptual Framework
Limited Liability Corporation
18. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Contra Account
Internal users
Deficit
Bonds
19. Assets put into the business by the owner.
Passive Income
Annual Financial Statements
Owner Investment
Bailout
20. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Credit
Recordkeeping
Revenue Recognition Principle
Assets
21. List of accounts used by a company' includes and identification number for each account.
Internal transactions
Credit
Accounting Cycle
Chart of Accounts
22. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Mergers
Monetary Unit Assumption
Account
Corporation
23. Debt securities that are issued by a borrower to raise capital . Bonds guarantee payments of the original amount borrowe plus interest and/or repayable on a fixed rate when the bond matures.
Account Balance
Intangible assets
Sole Propietorship
Bonds
24. Gross increase in equity from a company's business activities that earn income.
Revenues
Temporary Accounts
Passive Income
Measurement Principle
25. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Materiality Constraint
Accrual Basis Accounting
Securities and Exchange Commission
Accounting Cycle
26. 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
IRA (Individual Retirement Account)
Sarbanes-Oxley Act (SOX)
Partnership
Conceptual Framework
27. Rules that specify acceptable accounting practices.
Ethics
Shares
Interim Financial Statements
Generally Accepted Accounting Principles
28. Income that is available after all of the essential financial commitments have been paid.
Accounting Cycle
Current Ratio
Discretionary Income
Financial Accounting Standards Board
29. Area of accounting aimed mainly at serving external users.
International Accounting Standards Board
Operating Cycle
Internal users
Financial Accounting
30. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Unearned Revenues
SMART Goal
Posting
Internal transactions
31. Optional entries recorded at the beginning of a period that prepare the accounts for the usual journal entries as if adjusting entries had not occurred in the prior period.
Sole Propietorship
Reversing Entries
Unclassified Balance Sheets
Adjusted Trial Balance
32. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Income Statement
Bailout
Recordkeeping
Temporary Accounts
33. A loan that is backed by collateral such as cars - houses - or other assets.
Secured Loan
Working Papers
Generally Accepted Accounting Principles
Financial Accounting Standards Board
34. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
SEC (Securites and Exchange Commision)
Post Closing Trial Balance
Financial Accounting Standards Board
Interim Financial Statements
35. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Depreciation
Risk Tolerance
Corporations
Unearned Revenue
36. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Source Documents
Statement of Cash Flows
Return
Plant Assets
37. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Secured Loan
Generally Accepted Accounting Principles
Book Value
Depreciation
38. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Matching Principle (or Expense Recognition Principle)
Bookkeeping
Assets
IRA (Individual Retirement Account)
39. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Account
Post Closing Trial Balance
Double Entry Accounting
Preferred Stock
40. Excess of expenses over revenues for a period.
Creditors
Pro Forma Financial Statement
Time Period Assumptions
Net Loss
41. Statements that show the effect of proposed transactions and events as if they had occurred.
Liabilities
Pro Forma Financial Statement
Partnership
Sole Propietorship
42. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Materiality Constraint
Shareholders
Mergers
Debt Ratio
43. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Double Entry Accounting
Current Ratio
Expenses
Work Sheet
44. An expense that changes from period to perio - such as food or gasoline costs.
Interim Financial Statements
Risk
Varaiable Expense
Partnership Agreement
45. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Cost-benefit Constraint
Deficit
Common Stock
Expanded Accounting Equation
46. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Time Period Assumptions
Journal
Current Liabilities
International Accounting Standards Board
47. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Source Documents
Cost Principle
Conceptual Framework
Managerial Accounting
48. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Matching Principle (or Expense Recognition Principle)
Long Term Liabilities
Unsecured Loan
Classified Balance Sheet
49. The money left over when income exceeds expenditure.
International Financial Reporting Standards
Surplus
Recordkeeping
Chart of Accounts
50. Outflows or using up of assets as part of operations of business to generate sales.
Annual Financial Statements
Expenses
Matching Principle
Temporary Accounts