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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.
Bailout
Accounting Period
Adjusting Entry
Matching Principle
2. Area of accounting aimed mainly at serving external users.
Sole Propietorship
Long Term Liabilities
Corporations
Financial Accounting
3. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Permanent Accounts
Risk
Statement of Cash Flows
Straight-line Depreciation Method
4. Principle that assumes transactions and events can be expressed in money units.
Account Balance
Business Entity Assumption
Working Papers
Monetary Unit Assumption
5. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Expenses
NASDAQ
Ponzi Scheme
Accrual Basis Accounting
6. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Securities and Exchange Commission
Unearned Revenue
Unadjusted Trial Balance
Financial Accounting Standards Board
7. A loan that is backed by collateral such as cars - houses - or other assets.
Account Balance
Conceptual Framework
Sarbanes-Oxley Act (SOX)
Secured Loan
8. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Corporations
Balance Sheet
Double Entry Accounting
Stock
9. 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.
Source Documents
Deficit
Expense Recognition Principle
Measurement Principle
10. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Permanent Accounts
Depreciation
Debit
Stock
11. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Shareholders
Post Closing Trial Balance
Creditors
Full Disclosure Principle
12. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Accounting Period
Ethical Dilemma
Audit
Acquisition
13. Record containing all accounts (with amounts) for a business.
Materiality Constraint
Ledger
Unclassified Balance Sheets
IRA (Individual Retirement Account)
14. Loaning or giving money to a business in orer to save it from bankruptcy.
Expanded Accounting Equation
Recordkeeping
Bailout
Events
15. List of accounts used by a company' includes and identification number for each account.
Account
Chart of Accounts
Closing process
Discretionary Income
16. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
SEC (Securites and Exchange Commision)
Temporary Accounts
Debt Ratio
Journalizing
17. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Business Entity Assumption
Financial Accounting
Operating Cycle
Credit
18. 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
Revenues
Sole Proprietorship
Sarbanes-Oxley Act (SOX)
Operating Cycle
19. 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.
Equity
Accounting Equation
Source Documents
Owner - Capital
20. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Audit
Ethical Dilemma
SMART Goal
Accrued Revenues
21. Exchanges of economic value between one entity and another entity.
IRA (Individual Retirement Account)
Monetary Unit Assumption
External Transactions
Securities and Exchange Commission
22. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Contra Account
Internal users
Surplus
Partnership Agreement
23. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Profit Margin
Corporation
Present Value
Full Disclosure Principle
24. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Accrued Revenues
NYSE (New York Stock Exchange)
Expense Recognition Principle
Securities and Exchange Commission
25. Business owned by a single person.
Limited Liability Corporation
Sole Propietorship
Portfolio Income
Partnership Agreement
26. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Closing Entries
Income Statement
Money Market Account
Source Documents
27. Business owned by two or more people.
Partnership
Accounting Cycle
Accounting
Balance Sheet
28. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Monetary Unit Assumption
Profit Margin
Income Summary
Measurement Principle
29. 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.
Accounting Period
Accrual Basis Accounting
Expense Recognition Principle
Reversing Entries
30. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Risk
Net Income
Current Liabilities
Statement of Cash Flows
31. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Expenses
Depreciation
Accrued Expenses
Natural Business Years
32. A corporation's basic ownership share.
Common Stock
Double Entry Accounting
Long Term Investments
CD (Certificate of Deposit)
33. Items paid for in advance of receiving their benefits. Classified as assets.
Financial Accounting
IRA (Individual Retirement Account)
Prepaid Expenses
Measurement Principle
34. 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.
Internal transactions
Accounting Period
Bonds
Balance Column Account
35. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Cost Principle
Net Loss
Journal
Straight-line Depreciation Method
36. Independent group of full-time members responsible for setting accounting rules.
Cost-benefit Constraint
Acquisition
Return on Assets
Financial Accounting Standards Board
37. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Work Sheet
Unearned Revenue
Bookkeeping
Limited Liability Corporation
38. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Sarbanes-Oxley Act (SOX)
Business Entity Assumption
Ethics
Equity
39. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Accounting Cycle
Recordkeeping
Income Summary
Current Assets
40. 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 Withdrawals
Liabilities
Revenues
Straight-line Depreciation Method
41. Journal entries that affect at least three accounts.
Secured Loan
Work Sheet
Adjusting Entry
Compound Journal Entries
42. Persons using accounting information who are not directly involved in running the organization.
Return on Assets
Expense Recognition Principle
External Users
Internal transactions
43. Statements that show the effect of proposed transactions and events as if they had occurred.
Pro Forma Financial Statement
Cost-benefit Constraint
Net Income
Bookkeeping
44. Accounting information is based on cost with potential subsequent adjustments to fair value.
CD (Certificate of Deposit)
Measurement Principle
Expenses
Statement of Cash Flows
45. Assets pulled out of the business by the owner.
Going-concern Assumptions
Balance Column Account
Income Statement
Owner Withdrawals
46. Happenings that both affect an organization's financial position and can be reliably measured.
Events
Classified Balance Sheet
Audit
International Financial Reporting Standards
47. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Temporary Accounts
IRA (Individual Retirement Account)
Return on Assets
Net Income
48. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Accounting Period
Shareholders
Expense Recognition Principle
Deficit
49. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Business Entity Assumption
Long Term Liabilities
Risk Tolerance
Ethics
50. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Income Statement
Cash Basis Accounting
Accounting Equation
Revenue Recognition Principle