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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 corporation's basic ownership share.
Fiscal Year
Full Disclosure Principle
Common Stock
NYSE (New York Stock Exchange)
2. Income from investments - including dividends - interest - or the sale of a property.
Fiscal Year
Return on Assets
Pro Forma Financial Statement
Portfolio Income
3. Excess of expenses over revenues for a period.
Current Assets
Closing process
Bailout
Net Loss
4. 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.
Risk Tolerance
Ponzi Scheme
Net Loss
Auditors
5. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Mergers
Unadjusted Trial Balance
Straight-line Depreciation Method
Posting Reference Column
6. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Corporation
External Users
Conceptual Framework
Stock
7. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Sarbanes-Oxley Act (SOX)
Depreciation
Time Period Assumptions
Present Value
8. Outflows or using up of assets as part of operations of business to generate sales.
Current Ratio
Bonds
Expenses
Debit
9. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Managerial Accounting
Account
Straight-line Depreciation Method
Current Liabilities
10. All purpose journal for recording the debits and credits of transactions and events.
Post Closing Trial Balance
General Journal
Auditors
Preferred Stock
11. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Full Disclosure Principle
Depreciation
Portfolio Income
Auditors
12. Rules that specify acceptable accounting practices.
Generally Accepted Accounting Principles
Measurement Principle
Time Period Assumptions
External Users
13. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Credit
Journalizing
Sole Proprietorship
Securities and Exchange Commission
14. Uncertainty about expected return.
Time Period Assumptions
Expense Recognition Principle
Limited Liability Corporation
Risk
15. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Book Value
Materiality Constraint
Source Documents
Operating Cycle
16. Monies (or sums of money) received from an investment; often in percent form.
Partnership
Return
Classified Balance Sheet
Time Period Assumptions
17. Entries recorded at the end of each accounting period to transfer end of period balances in revenue - gain - expense - loss - and withdrawal (dividend for a corporation) accounts to the capital account (to retain earnings for a corporation).
Closing Entries
Current Liabilities
Adjusting Entry
Mergers
18. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Managerial Accounting
Unclassified Balance Sheets
Source Documents
Depreciation
19. List of accounts used by a company' includes and identification number for each account.
Chart of Accounts
SMART Goal
Unsecured Loan
Accounting
20. Owners of a corporation who usually receive dividends. Also called shareholders.
Acquisition
Accounting Period
Surplus
Stockholders
21. Tool used to show the effects of transactions and events on individual accounts.
Ethics
T Account
Account Balance
Shareholders
22. Individuals or organizations that owe money.
Debtors
Expense Recognition Principle
Interim Financial Statements
Permanent Accounts
23. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Owner - Capital
Plant Assets
Unsecured Loan
Going-concern Assumptions
24. Assets pulled out of the business by the owner.
Interim Financial Statements
Sarbanes-Oxley Act (SOX)
Accounting
Owner Withdrawals
25. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Balance Sheet
Account Balance
Revenues
Reversing Entries
26. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Journal
Income Summary
Liabilities
Unearned Revenue
27. 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.
Acquisition
Balance Sheet
Account Balance
Reversing Entries
28. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Natural Business Years
Revenues
Monetary Unit Assumption
Materiality Constraint
29. Activities within an organization that can affect the accounting equation.
Money Market Account
Accrued Expenses
Going-concern Assumptions
Internal transactions
30. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Journal
Audit
Ponzi Scheme
Current Ratio
31. Business owned by one person that is not organized as a corporation.
Ledger
Sole Proprietorship
General Journal
Monetary Unit Assumption
32. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Double Entry Accounting
Post Closing Trial Balance
Monetary Unit Assumption
Work Sheet
33. A legal entity that is seperate from its owners.
Account Balance
Conceptual Framework
Corporations
Long Term Liabilities
34. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Ethical Dilemma
Cost-benefit Constraint
Post Closing Trial Balance
General Journal
35. Items paid for in advance of receiving their benefits. Classified as assets.
Audit
Portfolio Income
Prepaid Expenses
Cost Principle
36. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership
Internal transactions
Ethics
Stock
37. A loan that is backed by collateral such as cars - houses - or other assets.
Stock
Profit Margin
Secured Loan
Audit
38. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Full Disclosure Principle
Permanent Accounts
Financial Accounting
Compound Journal Entries
39. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Common Stock
Double Entry Accounting
Posting
Corporation
40. 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.
Closing process
Bonds
NYSE (New York Stock Exchange)
Portfolio Income
41. Principle that assumes transactions and events can be expressed in money units.
Secured Loan
Monetary Unit Assumption
Surplus
Partnership
42. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
External Users
Securities and Exchange Commission
Trial balance
Accrual Basis Accounting
43. Individuals or organizations entitled to receive payments
External Transactions
Stock
Creditors
Unearned Revenues
44. 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
Expanded Accounting Equation
SMART Goal
Limited Liability Corporation
Accrual Basis Accounting
45. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Corporation
Journal
Accrual Basis Accounting
Internal transactions
46. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Permanent Accounts
Business Entity Assumption
Return
Risk Tolerance
47. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Unearned Revenue
Current Assets
Working Papers
Debit
48. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Return
Materiality Constraint
Fiscal Year
Contra Account
49. Individuals hired to review financial reports and information systems of organizations.
External Transactions
Expense Recognition Principle
Auditors
Temporary Accounts
50. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Long Term Liabilities
Expenses
Balance Sheet
Common Stock