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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. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Work Sheet
Corporations
Long Term Investments
Natural Business Years
2. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Internal transactions
IPO
Money Market Account
Accrued Expenses
3. The central bank of the United States - with 12 Federal Reserve branch banks located in major cities throughout the nation. It helps to regulate the US monetary and banking system.
Cost-benefit Constraint
Fixed Expense
Monetary Unit Assumption
Federal Reserve System
4. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Compound Journal Entries
Ethical Dilemma
Credit
Discretionary Income
5. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Recordkeeping
Generally Accepted Accounting Principles
Account Balance
Profit Margin
6. Owners of a corporation who usually receive dividends. Also called stockholders.
NASDAQ
Accounting Equation
Passive Income
Shareholders
7. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Expanded Accounting Equation
Sole Proprietorship
Bonds
Post Closing Trial Balance
8. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Post Closing Trial Balance
Passive Income
Return
Long Term Investments
9. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Journalizing
International Financial Reporting Standards
Cost-benefit Constraint
Working Papers
10. Persons using accounting information who are directly involved in managing the organization.
Return on Assets
Preferred Stock
Internal users
Working Papers
11. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Current Assets
Partnership
Securities
Unadjusted Trial Balance
12. Income that is available after all of the essential financial commitments have been paid.
External Transactions
Current Liabilities
Common Stock
Discretionary Income
13. Record containing all accounts (with amounts) for a business.
Trial balance
International Accounting Standards Board
Partnership Agreement
Ledger
14. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Debt Ratio
Fiscal Year
Long Term Liabilities
Operating Cycle
15. The value of a future cash steam discounted at the appropriate market interest rate.
Internal users
Present Value
Trial balance
Shares
16. 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.
Fiscal Year
Compound Journal Entries
Adjusting Entry
Ponzi Scheme
17. Income from investments - including dividends - interest - or the sale of a property.
NASDAQ
Time Period Assumptions
Portfolio Income
Common Stock
18. 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.
Journalizing
Expense Recognition Principle
Liabilities
Statement of Cash Flows
19. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Ethics
Credit
Annual Financial Statements
Conceptual Framework
20. An expense that changes from period to perio - such as food or gasoline costs.
Varaiable Expense
Partnership Agreement
Net Loss
Statement of Owner's Equity
21. Business owned by one person that is not organized as a corporation.
Conceptual Framework
Sole Proprietorship
Deficit
Work Sheet
22. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Natural Business Years
Posting Reference Column
Posting
Discretionary Income
23. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Work Sheet
Net Loss
Long Term Liabilities
Prepaid Expenses
24. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Revenue Recognition Principle
Depreciation
Accrual Basis Accounting
Classified Balance Sheet
25. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Mergers
Managerial Accounting
Matching Principle (or Expense Recognition Principle)
Journal
26. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Sarbanes-Oxley Act (SOX)
Current Ratio
Time Period Assumptions
SEC (Securites and Exchange Commision)
27. Uncertainty about expected return.
Partnership
Risk
Surplus
External Users
28. The combining of two or more comapnies into one larger company.
Mergers
Secured Loan
Posting Reference Column
Creditors
29. A legal entity that is seperate from its owners.
Corporations
Mergers
Compound Journal Entries
Current Assets
30. Statements that show the effect of proposed transactions and events as if they had occurred.
Ponzi Scheme
Discretionary Income
Credit
Pro Forma Financial Statement
31. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Unadjusted Trial Balance
Varaiable Expense
Ethics
Working Papers
32. 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.
Return
Risk Tolerance
Income Statement
Balance Column Account
33. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Ethical Dilemma
Classified Balance Sheet
Profit Margin
Owner Investment
34. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Return on Assets
Measurement Principle
Securities
Adjusting Entry
35. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Cost-benefit Constraint
Corporation
Financial Accounting Standards Board
Cash Basis Accounting
36. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Statement of Cash Flows
Auditors
Long Term Liabilities
Accrued Expenses
37. 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.
Account Balance
Partnership
Ponzi Scheme
Expense Recognition Principle
38. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Account
Discretionary Income
Depreciation
Ethical Dilemma
39. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenues
Sole Proprietorship
Ethics
Full Disclosure Principle
40. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Temporary Accounts
Interim Financial Statements
Post Closing Trial Balance
Assets
41. 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
Liabilities
Account
NASDAQ
Accrued Expenses
42. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Straight-line Depreciation Method
Recordkeeping
Shares
Income Statement
43. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
External Transactions
Return
Unsecured Loan
Bonds
44. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Accounting Period
Assets
Internal transactions
45. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Revenue Recognition Principle
Assets
Contra Account
Ledger
46. 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
Source Documents
Operating Cycle
Recordkeeping
47. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Long Term Investments
Generally Accepted Accounting Principles
Statement of Owner's Equity
Conceptual Framework
48. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
SMART Goal
Current Ratio
Trial balance
Sole Propietorship
49. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Statement of Cash Flows
Events
Posting Reference Column
Intangible assets
50. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Unearned Revenues
Straight-line Depreciation Method
Contra Account
Permanent Accounts