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






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






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






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






5. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.






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






7. Activities within an organization that can affect the accounting equation.






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






9. Length of time covered by financial statements; also called reporting period.






10. 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.






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






12. Accounting standards set by the IASB which aim to develop a single set of global standards - to promote those standards - and converge national and international standards globally.






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






14. The first time a company sells shares of its stock to the public.






15. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.






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






17. Resources that a company owns or controls that are expected to provide current and future benefits to the business.






18. 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.






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






20. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.






21. Owners of a corporation who usually receive dividends. Also called stockholders.






22. 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.






23. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.






24. Income that is available after all of the essential financial commitments have been paid.






25. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.






26. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.






27. Business owned by a single person.






28. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.






29. Rules that specify acceptable accounting practices.






30. Principle that assumes transactions and events can be expressed in money units.






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






32. 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).






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






34. Balance sheet that broadly groups assets - liabilities - and equity accounts.






35. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.






36. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.






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






38. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.






39. Loaning or giving money to a business in orer to save it from bankruptcy.






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






41. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)






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






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






44. Area of accounting aimed mainly at serving the decision-making needs of internal users.






45. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity






46. Expenses that remain the same regardless of the circumstances.






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






48. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.






49. List of accounts used by a company' includes and identification number for each account.






50. Tool used to show the effects of transactions and events on individual accounts.