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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. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Plant Assets
Posting Reference Column
Ethics
Discretionary Income
2. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Closing process
Limited Liability Corporation
Sole Proprietorship
Partnership
3. Difference between total debits and total credits (including the beginning balance) for an account.
International Accounting Standards Board
Accrued Expenses
Stockholders
Account Balance
4. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Money Market Account
Accrued Expenses
Bailout
Classified Balance Sheet
5. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
IPO
Common Stock
Partnership Agreement
Audit
6. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Source Documents
Monetary Unit Assumption
Limited Liability Corporation
Debit
7. 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.
Deficit
Intangible assets
Federal Reserve System
Equity
8. 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.
Adjusting Entry
Accounting Period
Permanent Accounts
Ponzi Scheme
9. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Full Disclosure Principle
T Account
Deficit
Unearned Revenue
10. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Sole Propietorship
Ethics
Post Closing Trial Balance
Owner Withdrawals
11. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Stock
Compound Journal Entries
Adjusted Trial Balance
Long Term Liabilities
12. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Intangible assets
Trial balance
Balance Sheet
CD (Certificate of Deposit)
13. 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.
Income Summary
Liabilities
Securities
Temporary Accounts
14. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Classified Balance Sheet
Portfolio Income
Posting Reference Column
Plant Assets
15. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Cost Principle
External Users
Current Assets
Secured Loan
16. 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.
Present Value
Matching Principle
Partnership Agreement
Accounting Period
17. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Corporations
Bonds
Equity
Time Period Assumptions
18. Business owned by two or more people.
Post Closing Trial Balance
Chart of Accounts
Cash Basis Accounting
Partnership
19. Excess of expenses over revenues for a period.
Recordkeeping
Sole Propietorship
Net Loss
Money Market Account
20. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Accounting Cycle
Ethics
SEC (Securites and Exchange Commision)
Conceptual Framework
21. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Cash Basis Accounting
Permanent Accounts
Cost-benefit Constraint
Recordkeeping
22. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Prepaid Expenses
Audit
Fiscal Year
Profit Margin
23. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Account Balance
Bookkeeping
Expanded Accounting Equation
Financial Accounting
24. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Work Sheet
Financial Accounting
Equity
Long Term Investments
25. Uncertainty about expected return.
Creditors
Fixed Expense
Risk
Managerial Accounting
26. Tool used to show the effects of transactions and events on individual accounts.
International Financial Reporting Standards
T Account
Owner - Capital
Current Ratio
27. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Ledger
Chart of Accounts
Trial balance
Shares
28. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Account
Risk Tolerance
Depreciation
NYSE (New York Stock Exchange)
29. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Account
Recordkeeping
Closing Entries
Partnership Agreement
30. Monies (or sums of money) received from an investment; often in percent form.
Assets
Debit
Money Market Account
Return
31. Length of time covered by financial statements; also called reporting period.
Statement of Cash Flows
Accounting Period
Straight-line Depreciation Method
Audit
32. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Passive Income
Depreciation
Matching Principle (or Expense Recognition Principle)
Audit
33. Gross increase in equity from a company's business activities that earn income.
Materiality Constraint
Revenues
Surplus
Double Entry Accounting
34. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Acquisition
Interim Financial Statements
Shares
Statement of Cash Flows
35. Activities within an organization that can affect the accounting equation.
Long Term Investments
Money Market Account
Internal transactions
Securities
36. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Income Summary
Limited Liability Corporation
Monetary Unit Assumption
Going-concern Assumptions
37. Accounting information is based on cost with potential subsequent adjustments to fair value.
Measurement Principle
Ethical Dilemma
Adjusting Entry
Account
38. Rules that specify acceptable accounting practices.
Accrued Revenues
Debtors
Generally Accepted Accounting Principles
Operating Cycle
39. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Long Term Investments
Time Period Assumptions
Unsecured Loan
Creditors
40. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Shareholders
Acquisition
Passive Income
Cash Basis Accounting
41. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Current Ratio
Balance Column Account
Time Period Assumptions
Partnership
42. Account showing the owner's claim on company assets; equals owner investments plus net income (or less net loss) minus owner withdrawals since the company's inception. Also called Equity.
Varaiable Expense
Common Stock
Owner - Capital
Monetary Unit Assumption
43. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Business Entity Assumption
Statement of Owner's Equity
Matching Principle (or Expense Recognition Principle)
Measurement Principle
44. Expenses that remain the same regardless of the circumstances.
Long Term Investments
Sole Propietorship
Reversing Entries
Fixed Expense
45. The principle prescribing that revenue is recognized when earned.
Internal users
Credit
Common Stock
Revenue Recognition Principle
46. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Matching Principle
Internal transactions
Securities and Exchange Commission
CD (Certificate of Deposit)
47. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Accounting Cycle
Ethical Dilemma
Expanded Accounting Equation
Common Stock
48. 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
Pro Forma Financial Statement
Deficit
Sarbanes-Oxley Act (SOX)
Measurement Principle
49. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Full Disclosure Principle
Statement of Cash Flows
Bookkeeping
Partnership
50. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Accrued Revenues
Cash Basis Accounting
Corporation