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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. Individuals or organizations that owe money.
Prepaid Expenses
Ponzi Scheme
Net Loss
Debtors
2. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Limited Liability Corporation
Common Stock
Recordkeeping
Ponzi Scheme
3. Income from investments - including dividends - interest - or the sale of a property.
Varaiable Expense
NASDAQ
Debtors
Portfolio Income
4. Assets put into the business by the owner.
International Financial Reporting Standards
Owner Investment
Sarbanes-Oxley Act (SOX)
Assets
5. Owners of a corporation who usually receive dividends. Also called shareholders.
Cost Principle
Unclassified Balance Sheets
Expense Recognition Principle
Stockholders
6. Owners of a corporation who usually receive dividends. Also called stockholders.
Monetary Unit Assumption
Accounting Period
Account Balance
Shareholders
7. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
International Financial Reporting Standards
CD (Certificate of Deposit)
Owner - Capital
External Users
8. 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.
Accrued Revenues
Bonds
Owner Withdrawals
Income Statement
9. 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.
Federal Reserve System
Managerial Accounting
Intangible assets
Risk Tolerance
10. Journal entries that affect at least three accounts.
Expenses
Operating Cycle
Current Assets
Compound Journal Entries
11. 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.
Matching Principle
Preferred Stock
NYSE (New York Stock Exchange)
Current Liabilities
12. Goals that are specific - measurable - attainable - realistic - and time bound.
Passive Income
Internal users
SMART Goal
Interim Financial Statements
13. Persons using accounting information who are not directly involved in running the organization.
Depreciation
Straight-line Depreciation Method
External Users
Debt Ratio
14. A loan that is backed by collateral such as cars - houses - or other assets.
Sole Propietorship
Financial Accounting Standards Board
Matching Principle (or Expense Recognition Principle)
Secured Loan
15. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
External Users
Current Liabilities
Internal users
Statement of Owner's Equity
16. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Cash Basis Accounting
General Journal
Unsecured Loan
Acquisition
17. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Money Market Account
Passive Income
Going-concern Assumptions
Events
18. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Money Market Account
Journalizing
Classified Balance Sheet
Current Ratio
19. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
NYSE (New York Stock Exchange)
Debt Ratio
Going-concern Assumptions
Accounting Equation
20. Business owned by a single person.
Sole Propietorship
Financial Accounting
Closing Entries
Matching Principle (or Expense Recognition Principle)
21. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Financial Accounting
Double Entry Accounting
Ponzi Scheme
Compound Journal Entries
22. The combining of two or more comapnies into one larger company.
Common Stock
Sole Proprietorship
Mergers
Plant Assets
23. Business owned by two or more people.
Annual Financial Statements
Partnership
Classified Balance Sheet
Net Loss
24. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Materiality Constraint
Ledger
Full Disclosure Principle
25. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Work Sheet
Surplus
Return on Assets
Depreciation
26. Gross increase in equity from a company's business activities that earn income.
Internal users
Stockholders
Audit
Revenues
27. Assets = Liabilities + Equity; Equity equals [Owner capital - owner withdrawal + revenue - expenses] for a non-corporation; Equity equals [Contributed capital - retained earnings + revenue - expenses] for a corporation where dividends are subtracted
Full Disclosure Principle
Expense Recognition Principle
Expanded Accounting Equation
Shareholders
28. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Journal
Closing Entries
Fixed Expense
29. 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.
Securities and Exchange Commission
Full Disclosure Principle
Adjusting Entry
Liabilities
30. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Owner Investment
Acquisition
Recordkeeping
NYSE (New York Stock Exchange)
31. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Work Sheet
Corporation
Generally Accepted Accounting Principles
Cost Principle
32. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Generally Accepted Accounting Principles
Securities and Exchange Commission
Debtors
Recordkeeping
33. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Corporation
Current Ratio
Ponzi Scheme
IPO
34. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Securities
Revenue Recognition Principle
Shares
Federal Reserve System
35. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Corporation
Matching Principle (or Expense Recognition Principle)
Acquisition
Bailout
36. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
Accrued Expenses
Balance Sheet
Work Sheet
37. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Return on Assets
Plant Assets
Accrued Expenses
Credit
38. 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.
Return on Assets
Liabilities
Secured Loan
Owner Withdrawals
39. Statements that show the effect of proposed transactions and events as if they had occurred.
Pro Forma Financial Statement
Varaiable Expense
Sole Propietorship
Bailout
40. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Present Value
Stockholders
Annual Financial Statements
Post Closing Trial Balance
41. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Trial balance
Internal users
Owner - Capital
Federal Reserve System
42. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Time Period Assumptions
Fiscal Year
Book Value
Statement of Cash Flows
43. List of accounts and balances prepared before accounting adjustments are recorded and posted.
External Users
Fixed Expense
Monetary Unit Assumption
Unadjusted Trial Balance
44. 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).
Adjusting Entry
Closing Entries
Operating Cycle
External Transactions
45. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Working Papers
Internal transactions
Bonds
Sole Proprietorship
46. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Unsecured Loan
Accounting Equation
Cost-benefit Constraint
Book Value
47. Tool used to show the effects of transactions and events on individual accounts.
Monetary Unit Assumption
Full Disclosure Principle
T Account
Contra Account
48. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Money Market Account
Working Papers
Straight-line Depreciation Method
Posting
49. Principle that assumes transactions and events can be expressed in money units.
Ledger
SMART Goal
Expenses
Monetary Unit Assumption
50. 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
Posting
Unadjusted Trial Balance
Sarbanes-Oxley Act (SOX)
Generally Accepted Accounting Principles