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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. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Ponzi Scheme
Posting Reference Column
Unclassified Balance Sheets
Accounting Cycle
2. 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.
Expense Recognition Principle
Posting Reference Column
IPO
Accounting Cycle
3. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Internal users
Current Assets
Adjusted Trial Balance
Materiality Constraint
4. Expenses that remain the same regardless of the circumstances.
Sole Proprietorship
Present Value
Fixed Expense
Unadjusted Trial Balance
5. An expense that changes from period to perio - such as food or gasoline costs.
Financial Accounting Standards Board
Conceptual Framework
Varaiable Expense
Unclassified Balance Sheets
6. Business owned by a single person.
Sole Propietorship
Journalizing
Secured Loan
Assets
7. Individuals or organizations entitled to receive payments
Creditors
Fiscal Year
Reversing Entries
Debit
8. The first time a company sells shares of its stock to the public.
Plant Assets
Accounting Equation
Unearned Revenues
IPO
9. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Classified Balance Sheet
Fiscal Year
Auditors
IPO
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.
Varaiable Expense
Straight-line Depreciation Method
Sole Propietorship
Debt Ratio
11. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Conceptual Framework
Balance Sheet
Cash Basis Accounting
Unadjusted Trial Balance
12. 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.
Reversing Entries
Owner - Capital
Partnership
Balance Column Account
13. Owners of a corporation who usually receive dividends. Also called stockholders.
Generally Accepted Accounting Principles
Internal transactions
Closing process
Shareholders
14. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Passive Income
SEC (Securites and Exchange Commision)
Accounting Period
Internal users
15. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Classified Balance Sheet
Varaiable Expense
Sole Proprietorship
Cost-benefit Constraint
16. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Unearned Revenues
Post Closing Trial Balance
Unsecured Loan
SEC (Securites and Exchange Commision)
17. Area of accounting aimed mainly at serving external users.
Matching Principle (or Expense Recognition Principle)
Expense Recognition Principle
Financial Accounting
Bailout
18. Owners of a corporation who usually receive dividends. Also called shareholders.
Matching Principle
Stockholders
Unclassified Balance Sheets
Expenses
19. Statements that show the effect of proposed transactions and events as if they had occurred.
Pro Forma Financial Statement
Partnership
Statement of Cash Flows
Accounting Period
20. 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.
Recordkeeping
Sole Proprietorship
Ponzi Scheme
Varaiable Expense
21. The principle prescribing that revenue is recognized when earned.
Current Ratio
Debit
Revenue Recognition Principle
Pro Forma Financial Statement
22. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Accounting Equation
Reversing Entries
Bonds
Business Entity Assumption
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.
Accrual Basis Accounting
Cash Basis Accounting
IRA (Individual Retirement Account)
Adjusting Entry
24. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Expenses
External Users
Debt Ratio
Accounting
25. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Profit Margin
Adjusting Entry
Time Period Assumptions
Ponzi Scheme
26. Persons using accounting information who are directly involved in managing the organization.
Expenses
Income Statement
Internal users
Annual Financial Statements
27. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Current Ratio
Balance Column Account
Time Period Assumptions
Profit Margin
28. 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
Discretionary Income
Preferred Stock
Debtors
Securities
29. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Generally Accepted Accounting Principles
Posting
Matching Principle (or Expense Recognition Principle)
Sole Proprietorship
30. The combining of two or more comapnies into one larger company.
Mergers
Events
Common Stock
Going-concern Assumptions
31. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
Adjusting Entry
Accounting
Debit
32. 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
Risk Tolerance
Plant Assets
Deficit
Expanded Accounting Equation
33. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Present Value
Deficit
Internal users
Operating Cycle
34. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Limited Liability Corporation
Double Entry Accounting
Statement of Cash Flows
Stock
35. Journal entries that affect at least three accounts.
SEC (Securites and Exchange Commision)
Debit
Compound Journal Entries
T Account
36. Activities within an organization that can affect the accounting equation.
Internal transactions
Partnership
Measurement Principle
Managerial Accounting
37. Gross increase in equity from a company's business activities that earn income.
Owner - Capital
Revenues
Cost-benefit Constraint
Temporary Accounts
38. Persons using accounting information who are not directly involved in running the organization.
Surplus
Long Term Investments
Acquisition
External Users
39. Tool used to show the effects of transactions and events on individual accounts.
Current Ratio
Intangible assets
T Account
Accrual Basis Accounting
40. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenue
Work Sheet
Common Stock
Time Period Assumptions
41. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Corporation
Compound Journal Entries
Contra Account
Income Summary
42. 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
SEC (Securites and Exchange Commision)
Reversing Entries
Temporary Accounts
43. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Expanded Accounting Equation
Accounting Period
Net Income
External Users
44. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Profit Margin
Expenses
Accrual Basis Accounting
Sole Proprietorship
45. 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
Full Disclosure Principle
Fixed Expense
Sarbanes-Oxley Act (SOX)
Return on Assets
46. A loan that is backed by collateral such as cars - houses - or other assets.
Long Term Liabilities
Accounting Period
Work Sheet
Secured Loan
47. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Materiality Constraint
Return
Adjusting Entry
Contra Account
48. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Accrued Expenses
Full Disclosure Principle
Current Ratio
Owner Withdrawals
49. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Contra Account
Reversing Entries
International Accounting Standards Board
Book Value
50. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Monetary Unit Assumption
Audit
Debtors
Work Sheet