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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. 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.
Unclassified Balance Sheets
CD (Certificate of Deposit)
Ethical Dilemma
Expense Recognition Principle
2. 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).
General Journal
Income Summary
Managerial Accounting
Money Market Account
3. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Corporations
Going-concern Assumptions
Ledger
Internal users
4. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
SEC (Securites and Exchange Commision)
Ponzi Scheme
Shareholders
Risk Tolerance
5. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
SEC (Securites and Exchange Commision)
Money Market Account
Assets
Statement of Cash Flows
6. Gross increase in equity from a company's business activities that earn income.
Revenues
Acquisition
Risk
Risk Tolerance
7. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Posting
Return on Assets
NASDAQ
Portfolio Income
8. Owner's claim on the assets of a business; equals the residual interest in an entity's assets after deducting liabilities. Also called net assets.
Equity
Closing process
IRA (Individual Retirement Account)
Measurement Principle
9. Assets put into the business by the owner.
Accrual Basis Accounting
Money Market Account
Owner Investment
Measurement Principle
10. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Time Period Assumptions
Unearned Revenue
Liabilities
Internal transactions
11. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Bailout
Post Closing Trial Balance
Bookkeeping
Conceptual Framework
12. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Corporation
Bailout
Trial balance
Current Liabilities
13. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Bonds
Limited Liability Corporation
Posting
Reversing Entries
14. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Net Income
Matching Principle (or Expense Recognition Principle)
Debt Ratio
Unsecured Loan
15. Create the Public Company Accounting Oversight Board - regulates analyst conflicts - imposes corporate governance requirements - enhances accounting and control disclosures - impacts insider transactions and executive loans - establishes new types of
Materiality Constraint
Limited Liability Corporation
Cost-benefit Constraint
Sarbanes-Oxley Act (SOX)
16. 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.
Risk Tolerance
Income Statement
Operating Cycle
Return
17. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Revenue Recognition Principle
Revenues
Passive Income
Time Period Assumptions
18. Persons using accounting information who are not directly involved in running the organization.
Expanded Accounting Equation
Shareholders
External Users
General Journal
19. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Current Ratio
SEC (Securites and Exchange Commision)
Net Income
Shareholders
20. A loan that is backed by collateral such as cars - houses - or other assets.
NASDAQ
T Account
Secured Loan
Partnership Agreement
21. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Portfolio Income
Income Summary
Going-concern Assumptions
Cost-benefit Constraint
22. Area of accounting aimed mainly at serving the decision-making needs of internal users.
International Accounting Standards Board
Debtors
Managerial Accounting
Federal Reserve System
23. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Partnership Agreement
Expenses
Statement of Owner's Equity
Long Term Liabilities
24. List of accounts and balances prepared after period-end adjustments are recorded and posted.
External Users
Liabilities
Adjusted Trial Balance
Internal users
25. A tax deferred account that allows individuals to plan for their retirement.
IRA (Individual Retirement Account)
Accounting Period
External Transactions
Net Income
26. Excess of expenses over revenues for a period.
Expense Recognition Principle
Long Term Liabilities
Net Loss
Cost Principle
27. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Closing Entries
CD (Certificate of Deposit)
Business Entity Assumption
Annual Financial Statements
28. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Present Value
International Financial Reporting Standards
Plant Assets
Cash Basis Accounting
29. 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.
External Transactions
Double Entry Accounting
NYSE (New York Stock Exchange)
Sarbanes-Oxley Act (SOX)
30. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
Liabilities
Income Summary
Recordkeeping
31. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Liabilities
Corporation
Current Ratio
External Users
32. 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.
International Financial Reporting Standards
Matching Principle
Common Stock
Chart of Accounts
33. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Classified Balance Sheet
Journal
Liabilities
Account Balance
34. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Secured Loan
Ethical Dilemma
Passive Income
SEC (Securites and Exchange Commision)
35. Income from investments - including dividends - interest - or the sale of a property.
Portfolio Income
Federal Reserve System
Interim Financial Statements
Return
36. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Current Liabilities
NYSE (New York Stock Exchange)
Working Papers
Unclassified Balance Sheets
37. Owners of a corporation who usually receive dividends. Also called stockholders.
Financial Accounting
Mergers
Shareholders
Closing process
38. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Current Assets
Credit
Expenses
Matching Principle
39. Independent group of full-time members responsible for setting accounting rules.
Account Balance
Present Value
Financial Accounting Standards Board
Cost-benefit Constraint
40. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Liabilities
Book Value
Ledger
Bookkeeping
41. Business owned by one person that is not organized as a corporation.
Common Stock
Sole Proprietorship
Current Liabilities
Journal
42. The first time a company sells shares of its stock to the public.
Bailout
IPO
Return
Chart of Accounts
43. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Ledger
Accrual Basis Accounting
Common Stock
Accounting Period
44. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Matching Principle (or Expense Recognition Principle)
Intangible assets
Current Assets
Going-concern Assumptions
45. Activities within an organization that can affect the accounting equation.
NASDAQ
Account Balance
Sole Propietorship
Internal transactions
46. 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
Accounting Equation
Statement of Cash Flows
NASDAQ
Current Assets
47. 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.
Balance Sheet
Net Loss
Creditors
Matching Principle
48. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Account
Accrued Revenues
Closing process
T Account
49. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Accrual Basis Accounting
Partnership
Post Closing Trial Balance
Time Period Assumptions
50. 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.
Creditors
Ponzi Scheme
Unsecured Loan
Partnership