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DSST Principles Of Finance

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. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.






2. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.






3. Obligations not due to be paid within one year or the operating cycle - whichever is longer.






4. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.






5. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.






6. Statements that show the effect of proposed transactions and events as if they had occurred.






7. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.






8. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.






9. 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.






10. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.






11. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.






12. Analysis and report of an organization's accounting system - its records - and its reports using various tests.






13. Outflows or using up of assets as part of operations of business to generate sales.






14. The principle prescribing that revenue is recognized when earned.






15. 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.






16. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.






17. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.






18. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.






19. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.






20. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.






21. The twelve month period that ends when a company's sales activities are at their lowest point.






22. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.






23. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.






24. Gross increase in equity from a company's business activities that earn income.






25. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.






26. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.






27. Difference between total debits and total credits (including the beginning balance) for an account.






28. A legal entity that is seperate from its owners.






29. Monies (or sums of money) received from an investment; often in percent form.






30. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.






31. Unincorporated association of two or more persons to pursue a business for profit as co-owners.






32. Assets put into the business by the owner.






33. Area of accounting aimed mainly at serving external users.






34. Excess of expenses over revenues for a period.






35. 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.






36. Report of changes in equity over a period; adjusted for increases and for decreases.

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37. A loan that is not backed by collateral - but by the promise of the borrower to repay it.






38. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.






39. 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






40. List of accounts and balances prepared after period-end adjustments are recorded and posted.






41. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).






42. Record containing all accounts (with amounts) for a business.






43. 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.






44. Items paid for in advance of receiving their benefits. Classified as assets.






45. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.






46. 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.






47. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.






48. 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).






49. Uncertainty about expected return.






50. Persons using accounting information who are not directly involved in running the organization.







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