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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. Gross increase in equity from a company's business activities that earn income.
Revenues
Unadjusted Trial Balance
Current Ratio
Discretionary Income
2. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Sole Propietorship
Unearned Revenues
Time Period Assumptions
CD (Certificate of Deposit)
3. Difference between total debits and total credits (including the beginning balance) for an account.
Surplus
Adjusted Trial Balance
Materiality Constraint
Account Balance
4. Income that is available after all of the essential financial commitments have been paid.
Expense Recognition Principle
Discretionary Income
External Transactions
Generally Accepted Accounting Principles
5. An expense that changes from period to perio - such as food or gasoline costs.
Common Stock
Managerial Accounting
Varaiable Expense
Long Term Investments
6. Monies (or sums of money) received from an investment; often in percent form.
Return
Pro Forma Financial Statement
Trial balance
External Transactions
7. Individuals hired to review financial reports and information systems of organizations.
Intangible assets
Money Market Account
Balance Column Account
Auditors
8. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Journal
Depreciation
Debit
Profit Margin
9. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Accounting Equation
Debit
Business Entity Assumption
Posting
10. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Current Assets
Accounting
Stockholders
Net Income
11. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Account
Secured Loan
Passive Income
Accounting Cycle
12. Expenses that remain the same regardless of the circumstances.
Cash Basis Accounting
Cost Principle
Fixed Expense
Audit
13. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Account
Statement of Cash Flows
Financial Accounting
Expanded Accounting Equation
14. Creditors' claims on an organization's assets; involves a probable future payment of assets - products - or services that a company is obligated to make due to past transactions or events.
Cost Principle
Liabilities
Prepaid Expenses
Net Income
15. Assets pulled out of the business by the owner.
Common Stock
Time Period Assumptions
Owner Withdrawals
Revenues
16. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Equity
Internal transactions
Long Term Liabilities
Permanent Accounts
17. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Federal Reserve System
Full Disclosure Principle
Double Entry Accounting
Adjusted Trial Balance
18. Principle that assumes transactions and events can be expressed in money units.
Money Market Account
Depreciation
Monetary Unit Assumption
T Account
19. Items paid for in advance of receiving their benefits. Classified as assets.
Managerial Accounting
Bailout
Prepaid Expenses
Closing Entries
20. Income from investments - including dividends - interest - or the sale of a property.
Going-concern Assumptions
Portfolio Income
Acquisition
Shares
21. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
SEC (Securites and Exchange Commision)
Creditors
Depreciation
Materiality Constraint
22. 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).
Accrued Expenses
Ponzi Scheme
Income Summary
Money Market Account
23. List of accounts used by a company' includes and identification number for each account.
Chart of Accounts
Federal Reserve System
Long Term Liabilities
Generally Accepted Accounting Principles
24. 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.
Conceptual Framework
Current Liabilities
Reversing Entries
Accounting Cycle
25. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Full Disclosure Principle
Source Documents
Debtors
Debt Ratio
26. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
SEC (Securites and Exchange Commision)
Liabilities
Money Market Account
Book Value
27. The principle prescribing that revenue is recognized when earned.
Fixed Expense
Revenue Recognition Principle
Unearned Revenues
Net Income
28. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Cost Principle
Materiality Constraint
Fixed Expense
Creditors
29. Statements that show the effect of proposed transactions and events as if they had occurred.
Balance Column Account
Prepaid Expenses
Pro Forma Financial Statement
Debt Ratio
30. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Stockholders
Auditors
Securities and Exchange Commission
Preferred Stock
31. The twelve month period that ends when a company's sales activities are at their lowest point.
Natural Business Years
Posting Reference Column
Risk
Surplus
32. Persons using accounting information who are directly involved in managing the organization.
Time Period Assumptions
SEC (Securites and Exchange Commision)
Internal users
Bookkeeping
33. A loan that is backed by collateral such as cars - houses - or other assets.
Permanent Accounts
Managerial Accounting
Secured Loan
Ethics
34. Individuals or organizations that owe money.
Straight-line Depreciation Method
Credit
Debtors
Working Papers
35. A corporation's basic ownership share.
Revenues
Common Stock
Compound Journal Entries
Long Term Liabilities
36. A tax deferred account that allows individuals to plan for their retirement.
IRA (Individual Retirement Account)
Cost Principle
Adjusted Trial Balance
Cash Basis Accounting
37. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Plant Assets
Bookkeeping
Accrued Expenses
CD (Certificate of Deposit)
38. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Temporary Accounts
Recordkeeping
Prepaid Expenses
Risk
39. Record containing all accounts (with amounts) for a business.
Ledger
IRA (Individual Retirement Account)
IPO
Accrued Expenses
40. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Prepaid Expenses
Adjusting Entry
Going-concern Assumptions
Trial balance
41. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Posting Reference Column
Expense Recognition Principle
Closing Entries
Working Papers
42. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Materiality Constraint
Balance Column Account
Balance Sheet
Financial Accounting
43. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Present Value
Return on Assets
Auditors
Long Term Investments
44. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Unsecured Loan
IRA (Individual Retirement Account)
CD (Certificate of Deposit)
Sarbanes-Oxley Act (SOX)
45. 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.
Income Statement
Intangible assets
Profit Margin
Corporations
46. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Current Assets
Natural Business Years
Net Loss
Long Term Investments
47. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Unearned Revenues
Account
Auditors
Ethics
48. 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
Long Term Liabilities
Debit
Partnership
49. Persons using accounting information who are not directly involved in running the organization.
Events
Preferred Stock
External Users
Credit
50. Accounting information is based on cost with potential subsequent adjustments to fair value.
Revenues
Measurement Principle
Expanded Accounting Equation
Straight-line Depreciation Method