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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. 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.
Posting Reference Column
Financial Accounting Standards Board
Accrued Revenues
Recordkeeping
2. Report of changes in equity over a period; adjusted for increases and for decreases.
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3. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Generally Accepted Accounting Principles
Plant Assets
Corporation
Owner Withdrawals
4. Accounting information is based on cost with potential subsequent adjustments to fair value.
Owner - Capital
Measurement Principle
Natural Business Years
Account Balance
5. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
NASDAQ
Accounting
CD (Certificate of Deposit)
Unearned Revenues
6. A security representing a share of ownership in a company - providing voting rights - and entitling the holer to a share of the company's success through dividends and/or capital appreciation.
Common Stock
Cost Principle
Surplus
Unadjusted Trial Balance
7. Outflows or using up of assets as part of operations of business to generate sales.
Debtors
Materiality Constraint
Internal transactions
Expenses
8. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Financial Accounting
Unadjusted Trial Balance
Ethical Dilemma
SEC (Securites and Exchange Commision)
9. Uncertainty about expected return.
Risk Tolerance
Temporary Accounts
Matching Principle
Risk
10. The first time a company sells shares of its stock to the public.
Accrued Revenues
Business Entity Assumption
IPO
Time Period Assumptions
11. 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.
Unadjusted Trial Balance
NYSE (New York Stock Exchange)
Reversing Entries
Ledger
12. Business owned by one person that is not organized as a corporation.
Conceptual Framework
Unearned Revenue
Debtors
Sole Proprietorship
13. 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.
Federal Reserve System
Ponzi Scheme
Cash Basis Accounting
Internal transactions
14. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Account
Current Liabilities
Statement of Owner's Equity
Classified Balance Sheet
15. The twelve month period that ends when a company's sales activities are at their lowest point.
Accrued Expenses
Natural Business Years
Owner Withdrawals
Long Term Liabilities
16. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Business Entity Assumption
Accounting Equation
Bailout
Preferred Stock
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
Statement of Cash Flows
Revenues
NASDAQ
Accrued Expenses
18. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern Assumptions
Owner - Capital
Interim Financial Statements
Cash Basis Accounting
19. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Compound Journal Entries
CD (Certificate of Deposit)
Natural Business Years
Posting Reference Column
20. 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.
Statement of Cash Flows
CD (Certificate of Deposit)
Reversing Entries
Debt Ratio
21. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Time Period Assumptions
Ledger
Preferred Stock
Equity
22. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Profit Margin
CD (Certificate of Deposit)
Time Period Assumptions
Double Entry Accounting
23. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
General Journal
Materiality Constraint
Monetary Unit Assumption
Balance Column Account
24. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Fiscal Year
Surplus
IPO
Debtors
25. Independent group of full-time members responsible for setting accounting rules.
Ledger
Internal users
Financial Accounting Standards Board
Surplus
26. Length of time covered by financial statements; also called reporting period.
Matching Principle (or Expense Recognition Principle)
Statement of Cash Flows
Accounting Period
Business Entity Assumption
27. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Fiscal Year
T Account
SMART Goal
Full Disclosure Principle
28. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Classified Balance Sheet
Account
Contra Account
Accrued Revenues
29. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Ponzi Scheme
Going-concern Assumptions
Double Entry Accounting
Corporation
30. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Matching Principle (or Expense Recognition Principle)
Pro Forma Financial Statement
Unsecured Loan
Internal transactions
31. Income from investments - including dividends - interest - or the sale of a property.
Adjusting Entry
Portfolio Income
Sarbanes-Oxley Act (SOX)
Time Period Assumptions
32. Principle that assumes transactions and events can be expressed in money units.
Equity
Balance Sheet
Adjusting Entry
Monetary Unit Assumption
33. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Current Assets
Accrued Revenues
Federal Reserve System
Full Disclosure Principle
34. A loan that is backed by collateral such as cars - houses - or other assets.
Journal
Secured Loan
IRA (Individual Retirement Account)
Preferred Stock
35. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Journal
Cash Basis Accounting
Deficit
Risk
36. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Cash Basis Accounting
Unearned Revenues
Discretionary Income
Working Papers
37. Excess of expenses over revenues for a period.
Acquisition
Corporations
Shares
Net Loss
38. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Balance Sheet
Passive Income
Classified Balance Sheet
T Account
39. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Double Entry Accounting
Internal users
Statement of Cash Flows
Partnership
40. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Sole Proprietorship
Fixed Expense
Statement of Cash Flows
Chart of Accounts
41. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
NASDAQ
Straight-line Depreciation Method
Unsecured Loan
Posting
42. Statements that show the effect of proposed transactions and events as if they had occurred.
Pro Forma Financial Statement
Partnership
Fixed Expense
T Account
43. Difference between total debits and total credits (including the beginning balance) for an account.
Risk Tolerance
Account Balance
Temporary Accounts
Work Sheet
44. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Return
Expenses
Unearned Revenue
Adjusted Trial Balance
45. Expenses that remain the same regardless of the circumstances.
Risk
Closing process
Fixed Expense
International Financial Reporting Standards
46. Business owned by two or more people.
Risk
Audit
Federal Reserve System
Partnership
47. 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.
Unadjusted Trial Balance
Statement of Cash Flows
Account Balance
Owner - Capital
48. Persons using accounting information who are directly involved in managing the organization.
Internal users
Net Income
Fiscal Year
Generally Accepted Accounting Principles
49. 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.
Cash Basis Accounting
Accrual Basis Accounting
Balance Sheet
Adjusting Entry
50. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Measurement Principle
Stockholders
Depreciation
Materiality Constraint