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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. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Cost-benefit Constraint
Balance Column Account
Contra Account
Book Value
2. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Accounting Cycle
Passive Income
Managerial Accounting
Recordkeeping
3. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Book Value
Net Income
Conceptual Framework
Balance Sheet
4. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Trial balance
Posting Reference Column
Equity
Current Assets
5. The twelve month period that ends when a company's sales activities are at their lowest point.
Statement of Owner's Equity
Posting
Partnership
Natural Business Years
6. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Equity
Shares
Acquisition
Reversing Entries
7. Owners of a corporation who usually receive dividends. Also called stockholders.
Securities
Current Ratio
Shareholders
Bailout
8. Record containing all accounts (with amounts) for a business.
Work Sheet
Business Entity Assumption
External Transactions
Ledger
9. Accounting standards set by the IASB which aim to develop a single set of global standards - to promote those standards - and converge national and international standards globally.
Prepaid Expenses
International Financial Reporting Standards
Assets
Deficit
10. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Equity
Ethical Dilemma
Straight-line Depreciation Method
Source Documents
11. Uncertainty about expected return.
Risk
Passive Income
Internal users
Net Income
12. Principle that assumes transactions and events can be expressed in money units.
Owner Withdrawals
Current Assets
Monetary Unit Assumption
Net Income
13. Business owned by one person that is not organized as a corporation.
Return
Matching Principle (or Expense Recognition Principle)
Sole Proprietorship
Prepaid Expenses
14. 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.
Expanded Accounting Equation
Interim Financial Statements
Bonds
Depreciation
15. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Common Stock
Reversing Entries
NASDAQ
Adjusted Trial Balance
16. 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.
Assets
Matching Principle (or Expense Recognition Principle)
Matching Principle
Book Value
17. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Partnership
Unsecured Loan
Present Value
Internal transactions
18. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Journal
Temporary Accounts
Account
Varaiable Expense
19. 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.
Bonds
Fixed Expense
Return
Accrued Revenues
20. Accounting information is based on cost with potential subsequent adjustments to fair value.
Chart of Accounts
Measurement Principle
Temporary Accounts
Deficit
21. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Accrued Revenues
Current Ratio
Accounting Equation
Stock
22. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Adjusted Trial Balance
Ethics
Securities and Exchange Commission
Partnership Agreement
23. 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.
Secured Loan
Adjusting Entry
Securities and Exchange Commission
Matching Principle
24. Individuals or organizations entitled to receive payments
Debtors
Depreciation
Expense Recognition Principle
Creditors
25. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Accrued Expenses
Double Entry Accounting
Accounting
Profit Margin
26. A tax deferred account that allows individuals to plan for their retirement.
Business Entity Assumption
Pro Forma Financial Statement
Sole Propietorship
IRA (Individual Retirement Account)
27. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Classified Balance Sheet
Cash Basis Accounting
Long Term Liabilities
Unclassified Balance Sheets
28. Temporary account used only in the closing process to which the balances of revenue and expense accounts (including any gains or losses) are transferred. Its balance is transferred to the capital account (or retained earnings for a corporation).
Income Summary
Matching Principle
Unclassified Balance Sheets
Contra Account
29. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
NASDAQ
Long Term Liabilities
Partnership
Owner Withdrawals
30. Income that is available after all of the essential financial commitments have been paid.
Return on Assets
Adjusting Entry
Discretionary Income
IPO
31. Tool used to show the effects of transactions and events on individual accounts.
Long Term Liabilities
T Account
Profit Margin
Corporation
32. Independent group of full-time members responsible for setting accounting rules.
Financial Accounting Standards Board
Work Sheet
Account
Debit
33. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Time Period Assumptions
Natural Business Years
Corporation
Internal users
34. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Plant Assets
Partnership
Post Closing Trial Balance
Intangible assets
35. 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)
Accounting
Trial balance
Partnership
36. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Account
Stock
Cost-benefit Constraint
Return
37. Loaning or giving money to a business in orer to save it from bankruptcy.
Bailout
Balance Column Account
Plant Assets
Events
38. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Passive Income
Bailout
Balance Column Account
Time Period Assumptions
39. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Book Value
Sole Proprietorship
Ponzi Scheme
NASDAQ
40. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Return
Expenses
Matching Principle (or Expense Recognition Principle)
Balance Column Account
41. An investment scam that uses the assets from new investors to make payments to older investors. Named after Charles Ponzi who used the technique in the early 1900s to defraud thousands of investors.
Current Liabilities
Varaiable Expense
Ponzi Scheme
Events
42. 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
Double Entry Accounting
Audit
Financial Accounting Standards Board
43. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Revenue Recognition Principle
Posting
Journal
Adjusting Entry
44. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
NASDAQ
Statement of Cash Flows
Income Statement
Sole Proprietorship
45. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Work Sheet
Debt Ratio
Accrued Expenses
Present Value
46. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Time Period Assumptions
Equity
Adjusted Trial Balance
Accounting Cycle
47. All purpose journal for recording the debits and credits of transactions and events.
External Transactions
General Journal
Chart of Accounts
Unadjusted Trial Balance
48. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Annual Financial Statements
Materiality Constraint
Assets
Closing process
49. The money left over when income exceeds expenditure.
Monetary Unit Assumption
Shares
Surplus
Unclassified Balance Sheets
50. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
IRA (Individual Retirement Account)
Return
Current Ratio
Shares