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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. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Federal Reserve System
Closing process
Profit Margin
Time Period Assumptions
2. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Unearned Revenue
Interim Financial Statements
Portfolio Income
Income Summary
3. 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.
SMART Goal
Reversing Entries
Going-concern Assumptions
Balance Sheet
4. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership
Internal transactions
Posting
Shareholders
5. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Income Summary
Source Documents
Income Statement
Preferred Stock
6. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Plant Assets
Cost-benefit Constraint
Cash Basis Accounting
Bookkeeping
7. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Common Stock
Bookkeeping
Cost-benefit Constraint
Assets
8. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
SMART Goal
General Journal
Balance Sheet
Interim Financial Statements
9. Individuals or organizations that owe money.
Preferred Stock
Debt Ratio
Creditors
Debtors
10. Expenses that remain the same regardless of the circumstances.
SEC (Securites and Exchange Commision)
Fixed Expense
Bookkeeping
Bonds
11. 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.
Time Period Assumptions
Adjusting Entry
External Transactions
Recordkeeping
12. Business owned by a single person.
Managerial Accounting
Debit
Unadjusted Trial Balance
Sole Propietorship
13. Journal entries that affect at least three accounts.
SMART Goal
Deficit
Compound Journal Entries
Financial Accounting Standards Board
14. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Closing Entries
Unclassified Balance Sheets
Double Entry Accounting
Limited Liability Corporation
15. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Accounting
Debit
T Account
Audit
16. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Net Income
Long Term Liabilities
Annual Financial Statements
Closing process
17. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Straight-line Depreciation Method
Posting
Portfolio Income
Discretionary Income
18. 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.
Expanded Accounting Equation
International Accounting Standards Board
Bonds
Stock
19. 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.
Ponzi Scheme
External Users
Federal Reserve System
Cost-benefit Constraint
20. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
IRA (Individual Retirement Account)
Accounting
Debit
Corporations
21. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Securities
Statement of Cash Flows
Operating Cycle
Risk Tolerance
22. Tool used to show the effects of transactions and events on individual accounts.
Unsecured Loan
T Account
Permanent Accounts
Preferred Stock
23. The combining of two or more comapnies into one larger company.
Mergers
Debt Ratio
NYSE (New York Stock Exchange)
Operating Cycle
24. Report of changes in equity over a period; adjusted for increases and for decreases.
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25. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Debit
IRA (Individual Retirement Account)
Contra Account
26. Length of time covered by financial statements; also called reporting period.
Long Term Investments
Accounting Period
Auditors
Current Assets
27. Assets pulled out of the business by the owner.
Owner Withdrawals
General Journal
Generally Accepted Accounting Principles
Common Stock
28. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Operating Cycle
Partnership Agreement
Temporary Accounts
Going-concern Assumptions
29. 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
Natural Business Years
NASDAQ
Bailout
Closing Entries
30. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Interim Financial Statements
Current Liabilities
Events
Risk Tolerance
31. Record containing all accounts (with amounts) for a business.
Contra Account
Ledger
Bookkeeping
External Transactions
32. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Federal Reserve System
Balance Column Account
Ponzi Scheme
Adjusted Trial Balance
33. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Intangible assets
Owner Withdrawals
Events
Passive Income
34. Loaning or giving money to a business in orer to save it from bankruptcy.
Closing Entries
Debtors
Bailout
Conceptual Framework
35. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
Closing Entries
Events
Stockholders
36. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Limited Liability Corporation
Compound Journal Entries
Accounting Cycle
Sole Propietorship
37. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Portfolio Income
Unclassified Balance Sheets
Bonds
Temporary Accounts
38. 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.
NYSE (New York Stock Exchange)
Debt Ratio
Adjusting Entry
Debit
39. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
External Users
Working Papers
SEC (Securites and Exchange Commision)
Statement of Owner's Equity
40. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Natural Business Years
Fixed Expense
Owner - Capital
Unearned Revenues
41. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
CD (Certificate of Deposit)
Accrued Expenses
Adjusting Entry
Balance Sheet
42. Persons using accounting information who are not directly involved in running the organization.
External Users
Accrual Basis Accounting
Classified Balance Sheet
Business Entity Assumption
43. Rules that specify acceptable accounting practices.
Generally Accepted Accounting Principles
Corporations
Revenues
Fiscal Year
44. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Accounting Period
Journal
Posting Reference Column
Cost Principle
45. 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.
Journal
Trial balance
Shareholders
Owner - Capital
46. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Balance Sheet
Securities
Debtors
Assets
47. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Creditors
Adjusted Trial Balance
Going-concern Assumptions
Acquisition
48. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Source Documents
Unsecured Loan
Accrual Basis Accounting
Current Liabilities
49. The money left over when income exceeds expenditure.
Debt Ratio
Federal Reserve System
Surplus
Book Value
50. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Debit
Stock
IPO
Unclassified Balance Sheets