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Test your basic knowledge |
DSST Principles Of Finance
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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. The principle prescribing that revenue is recognized when earned.
Money Market Account
Post Closing Trial Balance
Revenue Recognition Principle
Expense Recognition Principle
2. 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
Statement of Owner's Equity
Accounting
Expanded Accounting Equation
Account Balance
3. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Long Term Investments
Closing process
Straight-line Depreciation Method
Matching Principle (or Expense Recognition Principle)
4. Accounting information is based on cost with potential subsequent adjustments to fair value.
Double Entry Accounting
Measurement Principle
Revenues
Materiality Constraint
5. 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
Balance Column Account
Compound Journal Entries
Equity
Preferred Stock
6. The money left over when income exceeds expenditure.
Creditors
Surplus
IPO
Current Ratio
7. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Bailout
Trial balance
Debit
Corporations
8. Excess of expenses over revenues for a period.
Accounting Period
Net Loss
Managerial Accounting
Cost Principle
9. A legal entity that is seperate from its owners.
Corporations
Current Assets
Full Disclosure Principle
Shares
10. Rules that specify acceptable accounting practices.
Generally Accepted Accounting Principles
Owner Investment
Work Sheet
Income Statement
11. Business owned by a single person.
SMART Goal
Matching Principle
Posting
Sole Propietorship
12. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Matching Principle
Auditors
Time Period Assumptions
Account
13. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Cash Basis Accounting
Annual Financial Statements
Return
Unadjusted Trial Balance
14. Activities within an organization that can affect the accounting equation.
Shares
Materiality Constraint
Internal transactions
Generally Accepted Accounting Principles
15. Journal entries that affect at least three accounts.
Accrued Expenses
Common Stock
Compound Journal Entries
Money Market Account
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 Matching Principle.
Owner Withdrawals
Passive Income
SEC (Securites and Exchange Commision)
Expense Recognition Principle
17. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
SEC (Securites and Exchange Commision)
Current Assets
Classified Balance Sheet
Work Sheet
18. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
Working Papers
Permanent Accounts
Expenses
19. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Creditors
Depreciation
Statement of Cash Flows
Matching Principle
20. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Account
Matching Principle
Posting Reference Column
SMART Goal
21. Monies (or sums of money) received from an investment; often in percent form.
Adjusting Entry
Shares
Conceptual Framework
Return
22. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Credit
Adjusted Trial Balance
IRA (Individual Retirement Account)
Book Value
23. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Cash Basis Accounting
Contra Account
Current Assets
Accrued Expenses
24. Report of changes in equity over a period; adjusted for increases and for decreases.
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25. The combining of two or more comapnies into one larger company.
Owner Investment
Money Market Account
Mergers
Double Entry Accounting
26. Owners of a corporation who usually receive dividends. Also called shareholders.
Sole Propietorship
Stockholders
Classified Balance Sheet
Closing process
27. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Net Income
Balance Sheet
Accounting Equation
Work Sheet
28. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Assets
Owner Investment
Auditors
Working Papers
29. 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.
Matching Principle
Discretionary Income
External Transactions
Bookkeeping
30. 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
Partnership
Sarbanes-Oxley Act (SOX)
Income Summary
Unsecured Loan
31. 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
Money Market Account
Prepaid Expenses
Depreciation
32. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Acquisition
Journalizing
Plant Assets
33. Difference between total debits and total credits (including the beginning balance) for an account.
Portfolio Income
Financial Accounting Standards Board
Account Balance
Events
34. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Adjusted Trial Balance
Bonds
Corporation
Common Stock
35. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Accrued Expenses
Long Term Liabilities
Current Liabilities
Secured Loan
36. 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.
Time Period Assumptions
Ethical Dilemma
Common Stock
Liabilities
37. 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.
Income Summary
Accrued Revenues
Journalizing
Internal transactions
38. Exchanges of economic value between one entity and another entity.
External Transactions
Assets
Full Disclosure Principle
Posting
39. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Straight-line Depreciation Method
Time Period Assumptions
Materiality Constraint
Current Ratio
40. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Account Balance
Posting
Statement of Owner's Equity
Book Value
41. Record containing all accounts (with amounts) for a business.
Equity
External Users
Ledger
General Journal
42. 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
Risk
Securities and Exchange Commission
Money Market Account
43. Individuals or organizations entitled to receive payments
Creditors
Preferred Stock
Unclassified Balance Sheets
Unsecured Loan
44. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Cost Principle
CD (Certificate of Deposit)
SMART Goal
Fixed Expense
45. 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.
Current Ratio
Internal users
Book Value
Bonds
46. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Securities
Current Liabilities
Unadjusted Trial Balance
Intangible assets
47. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Unclassified Balance Sheets
Net Income
Stock
Classified Balance Sheet
48. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
Portfolio Income
Limited Liability Corporation
Federal Reserve System
49. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Sole Propietorship
Pro Forma Financial Statement
Intangible assets
Limited Liability Corporation
50. A corporation's basic ownership share.
Common Stock
Bailout
Financial Accounting Standards Board
Return on Assets