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Test your basic knowledge |
DSST Principles Of Finance
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Subjects
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dsst
,
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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. Exchanges of economic value between one entity and another entity.
Business Entity Assumption
External Transactions
SEC (Securites and Exchange Commision)
Book Value
2. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Income Summary
Credit
Plant Assets
Ledger
3. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Debt Ratio
Revenue Recognition Principle
Liabilities
Expenses
4. Persons using accounting information who are not directly involved in running the organization.
External Users
Matching Principle
Long Term Investments
Secured Loan
5. Record containing all accounts (with amounts) for a business.
Net Income
Unadjusted Trial Balance
Ledger
Accrual Basis Accounting
6. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Long Term Investments
Credit
Contra Account
Shareholders
7. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Limited Liability Corporation
Unearned Revenue
Accounting Equation
Permanent Accounts
8. Principle that assumes transactions and events can be expressed in money units.
Accrual Basis Accounting
Partnership Agreement
Monetary Unit Assumption
Cost Principle
9. Individuals or organizations entitled to receive payments
External Users
Creditors
Trial balance
Classified Balance Sheet
10. 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
Expanded Accounting Equation
Interim Financial Statements
Long Term Investments
Measurement Principle
11. Items paid for in advance of receiving their benefits. Classified as assets.
Equity
Prepaid Expenses
Temporary Accounts
Fixed Expense
12. Income from investments - including dividends - interest - or the sale of a property.
Discretionary Income
Auditors
Portfolio Income
IRA (Individual Retirement Account)
13. Rules that specify acceptable accounting practices.
Audit
Generally Accepted Accounting Principles
Accounting Equation
Assets
14. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Corporations
Cost-benefit Constraint
External Transactions
Interim Financial Statements
15. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Varaiable Expense
Going-concern Assumptions
Sole Propietorship
SMART Goal
16. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Business Entity Assumption
Source Documents
Secured Loan
Unearned Revenues
17. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Debtors
Post Closing Trial Balance
Expense Recognition Principle
Full Disclosure Principle
18. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Accounting Cycle
Balance Column Account
Owner Investment
Time Period Assumptions
19. Area of accounting aimed mainly at serving external users.
Financial Accounting
Posting
Adjusted Trial Balance
Stock
20. The combining of two or more comapnies into one larger company.
Mergers
Prepaid Expenses
Accounting Period
Partnership Agreement
21. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Partnership
Post Closing Trial Balance
Internal transactions
Pro Forma Financial Statement
22. 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
Return on Assets
Sarbanes-Oxley Act (SOX)
Accounting Equation
Expenses
23. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Bookkeeping
Operating Cycle
Fixed Expense
24. Individuals hired to review financial reports and information systems of organizations.
Deficit
Auditors
Statement of Cash Flows
Current Ratio
25. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Discretionary Income
Plant Assets
Account Balance
Current Liabilities
26. Individuals or organizations that owe money.
Debtors
Return
Ethical Dilemma
External Transactions
27. A tax deferred account that allows individuals to plan for their retirement.
Equity
IRA (Individual Retirement Account)
Posting Reference Column
Current Liabilities
28. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Fiscal Year
Credit
Managerial Accounting
Compound Journal Entries
29. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Ethical Dilemma
Securities
Owner Withdrawals
Working Papers
30. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Accrued Expenses
Plant Assets
Recordkeeping
Closing process
31. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Varaiable Expense
Portfolio Income
Securities and Exchange Commission
Statement of Cash Flows
32. 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.
Adjusting Entry
NYSE (New York Stock Exchange)
Stockholders
Partnership
33. 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
NASDAQ
General Journal
Adjusting Entry
Work Sheet
34. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Compound Journal Entries
Reversing Entries
Adjusted Trial Balance
Annual Financial Statements
35. Report of changes in equity over a period; adjusted for increases and for decreases.
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36. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Debit
SMART Goal
Securities and Exchange Commission
Cash Basis Accounting
37. Business owned by one person that is not organized as a corporation.
Operating Cycle
Sole Proprietorship
Debit
Bonds
38. List of accounts and balances prepared after period-end adjustments are recorded and posted.
IRA (Individual Retirement Account)
Adjusted Trial Balance
Expense Recognition Principle
International Accounting Standards Board
39. Assets put into the business by the owner.
Income Summary
SMART Goal
Owner Investment
Conceptual Framework
40. 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.
Net Loss
Long Term Liabilities
Revenues
Income Statement
41. 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.
Posting
Fixed Expense
Passive Income
Equity
42. The first time a company sells shares of its stock to the public.
Common Stock
Interim Financial Statements
Time Period Assumptions
IPO
43. A security representing partial ownership of the company. It gives the holer priority to dividends over common stock investors. Capital stock that provides a specific dividend - which is paid before any dividends are pai to common stock holders - an
Preferred Stock
Long Term Liabilities
Trial balance
Current Assets
44. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Long Term Investments
Double Entry Accounting
Working Papers
Financial Accounting Standards Board
45. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Intangible assets
Contra Account
Discretionary Income
Expanded Accounting Equation
46. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
SEC (Securites and Exchange Commision)
Financial Accounting
Debt Ratio
Debit
47. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenue
Discretionary Income
Post Closing Trial Balance
Balance Column Account
48. Gross increase in equity from a company's business activities that earn income.
Balance Column Account
Measurement Principle
Revenues
Full Disclosure Principle
49. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
CD (Certificate of Deposit)
Limited Liability Corporation
External Users
Federal Reserve System
50. Owners of a corporation who usually receive dividends. Also called shareholders.
Annual Financial Statements
Risk
Revenues
Stockholders
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