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DSST Principles Of Finance

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. 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






2. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.






3. Business owned by a single person.






4. Independent group of full-time members responsible for setting accounting rules.






5. The principle prescribing that revenue is recognized when earned.






6. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.






7. 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.






8. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.






9. A tax deferred account that allows individuals to plan for their retirement.






10. Persons using accounting information who are not directly involved in running the organization.






11. Owners of a corporation who usually receive dividends. Also called stockholders.






12. Balance sheet that broadly groups assets - liabilities - and equity accounts.






13. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.






14. The value of a future cash steam discounted at the appropriate market interest rate.






15. 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.






16. 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






17. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.






18. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.






19. Unincorporated association of two or more persons to pursue a business for profit as co-owners.






20. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.






21. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.






22. Excess of expenses over revenues for a period.






23. Items paid for in advance of receiving their benefits. Classified as assets.






24. Business owned by one person that is not organized as a corporation.






25. An expense that changes from period to perio - such as food or gasoline costs.






26. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.






27. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.






28. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.






29. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.






30. Loaning or giving money to a business in orer to save it from bankruptcy.






31. 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.






32. 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.






33. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.






34. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.






35. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.






36. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.






37. The combining of two or more comapnies into one larger company.






38. Area of accounting aimed mainly at serving external users.






39. The twelve month period that ends when a company's sales activities are at their lowest point.






40. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.






41. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.






42. A loan that is not backed by collateral - but by the promise of the borrower to repay it.






43. Journal entries that affect at least three accounts.






44. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.






45. Owners of a corporation who usually receive dividends. Also called shareholders.






46. 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.






47. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.






48. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.






49. Amount earned after subtracting all expenses necessary for and matched with sales for a period.






50. Length of time covered by financial statements; also called reporting period.