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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. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Current Assets
Accrued Expenses
Straight-line Depreciation Method
Owner - Capital
2. 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.
Time Period Assumptions
Closing process
Reversing Entries
Journal
3. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Cost-benefit Constraint
Secured Loan
Stockholders
Partnership Agreement
4. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting
Ethics
Accrued Revenues
Posting Reference Column
5. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Accounting
Cost-benefit Constraint
Assets
Revenues
6. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Generally Accepted Accounting Principles
Ethical Dilemma
Intangible assets
Risk
7. Business owned by one person that is not organized as a corporation.
Owner Withdrawals
Sole Proprietorship
Measurement Principle
Double Entry Accounting
8. Individuals hired to review financial reports and information systems of organizations.
Internal users
Auditors
Full Disclosure Principle
Audit
9. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
CD (Certificate of Deposit)
Materiality Constraint
Surplus
Internal transactions
10. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Expenses
Sarbanes-Oxley Act (SOX)
Corporation
Interim Financial Statements
11. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Bonds
Corporation
Statement of Cash Flows
Unearned Revenue
12. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Corporation
Unearned Revenue
Partnership Agreement
Operating Cycle
13. 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).
Post Closing Trial Balance
Money Market Account
Varaiable Expense
Closing Entries
14. A security representing a share of ownership in a company - providing voting rights - and entitling the holer to a share of the company's success through dividends and/or capital appreciation.
Common Stock
NASDAQ
Shares
SEC (Securites and Exchange Commision)
15. A tax deferred account that allows individuals to plan for their retirement.
Debit
Deficit
Working Papers
IRA (Individual Retirement Account)
16. Rules that specify acceptable accounting practices.
Financial Accounting
Accounting Cycle
Generally Accepted Accounting Principles
Profit Margin
17. Record containing all accounts (with amounts) for a business.
Ponzi Scheme
Return on Assets
Corporation
Ledger
18. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Fiscal Year
Working Papers
Interim Financial Statements
General Journal
19. Happenings that both affect an organization's financial position and can be reliably measured.
Securities and Exchange Commission
Events
Common Stock
Accounting Cycle
20. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Corporation
Interim Financial Statements
Going-concern Assumptions
Financial Accounting Standards Board
21. 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.
Balance Column Account
Present Value
Accounting
Equity
22. Individuals or organizations entitled to receive payments
Creditors
Account Balance
Trial balance
Plant Assets
23. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Mergers
Unclassified Balance Sheets
Partnership
Shareholders
24. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Accrual Basis Accounting
Bookkeeping
Bonds
Measurement Principle
25. Assets put into the business by the owner.
Prepaid Expenses
Owner Investment
Accrued Revenues
Balance Sheet
26. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Risk Tolerance
Work Sheet
SEC (Securites and Exchange Commision)
Return on Assets
27. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Shares
Conceptual Framework
Temporary Accounts
Accounting
28. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Natural Business Years
Long Term Liabilities
Fiscal Year
Current Liabilities
29. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Temporary Accounts
Acquisition
Unsecured Loan
Fiscal Year
30. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Managerial Accounting
Intangible assets
Preferred Stock
Interim Financial Statements
31. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Bookkeeping
Matching Principle (or Expense Recognition Principle)
Unadjusted Trial Balance
Assets
32. 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.
Plant Assets
Ponzi Scheme
Sarbanes-Oxley Act (SOX)
Events
33. Income from investments - including dividends - interest - or the sale of a property.
Source Documents
Fixed Expense
Portfolio Income
Reversing Entries
34. List of accounts used by a company' includes and identification number for each account.
Present Value
Balance Sheet
Chart of Accounts
Expenses
35. Statements that show the effect of proposed transactions and events as if they had occurred.
Pro Forma Financial Statement
Accounting Period
Work Sheet
Current Ratio
36. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
Income Summary
Ethics
Balance Column Account
37. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Balance Column Account
Audit
Unclassified Balance Sheets
Working Papers
38. Principle that assumes transactions and events can be expressed in money units.
General Journal
Return on Assets
Monetary Unit Assumption
Accounting Equation
39. All purpose journal for recording the debits and credits of transactions and events.
General Journal
Return on Assets
SEC (Securites and Exchange Commision)
Expense Recognition Principle
40. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Annual Financial Statements
Debtors
Journal
Sole Propietorship
41. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
SEC (Securites and Exchange Commision)
Annual Financial Statements
Equity
Contra Account
42. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Chart of Accounts
Permanent Accounts
Debt Ratio
Corporation
43. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Ethics
Closing Entries
Shares
International Financial Reporting Standards
44. 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.
Adjusting Entry
Time Period Assumptions
Book Value
Federal Reserve System
45. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Owner - Capital
Balance Column Account
Deficit
Measurement Principle
46. The principle prescribing that revenue is recognized when earned.
Annual Financial Statements
Bookkeeping
Temporary Accounts
Revenue Recognition Principle
47. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Corporations
Business Entity Assumption
Accrued Revenues
Auditors
48. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Preferred Stock
Stock
Bookkeeping
Account Balance
49. Independent group of full-time members responsible for setting accounting rules.
Financial Accounting Standards Board
Unearned Revenues
Expanded Accounting Equation
Generally Accepted Accounting Principles
50. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Straight-line Depreciation Method
Statement of Cash Flows
Managerial Accounting
Recordkeeping