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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. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Accounting Period
Fiscal Year
Passive Income
Expanded Accounting Equation
2. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Post Closing Trial Balance
Matching Principle (or Expense Recognition Principle)
Permanent Accounts
Cost Principle
3. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Sole Proprietorship
Annual Financial Statements
Posting
Pro Forma Financial Statement
4. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Money Market Account
NYSE (New York Stock Exchange)
Revenue Recognition Principle
Accrued Expenses
5. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern Assumptions
Unadjusted Trial Balance
Operating Cycle
Surplus
6. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Securities and Exchange Commission
Temporary Accounts
Revenue Recognition Principle
Double Entry Accounting
7. 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
Account
Expanded Accounting Equation
Bonds
SEC (Securites and Exchange Commision)
8. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Straight-line Depreciation Method
Acquisition
Long Term Investments
Matching Principle (or Expense Recognition Principle)
9. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Source Documents
Temporary Accounts
CD (Certificate of Deposit)
Full Disclosure Principle
10. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Ponzi Scheme
Accrual Basis Accounting
Current Liabilities
Prepaid Expenses
11. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Money Market Account
NYSE (New York Stock Exchange)
IPO
Interim Financial Statements
12. Statements that show the effect of proposed transactions and events as if they had occurred.
NASDAQ
Pro Forma Financial Statement
Reversing Entries
Income Summary
13. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Ledger
Statement of Cash Flows
Shares
14. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Time Period Assumptions
IPO
Ledger
Deficit
15. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Expense Recognition Principle
Materiality Constraint
Federal Reserve System
Recordkeeping
16. Assets put into the business by the owner.
NYSE (New York Stock Exchange)
External Transactions
Owner Investment
Auditors
17. Principle that assumes transactions and events can be expressed in money units.
Audit
Unadjusted Trial Balance
Monetary Unit Assumption
Measurement Principle
18. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Monetary Unit Assumption
Account Balance
Permanent Accounts
Ethics
19. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
NYSE (New York Stock Exchange)
Depreciation
Adjusting Entry
Long Term Liabilities
20. Goals that are specific - measurable - attainable - realistic - and time bound.
Federal Reserve System
SMART Goal
Current Assets
CD (Certificate of Deposit)
21. Accounting standards set by the IASB which aim to develop a single set of global standards - to promote those standards - and converge national and international standards globally.
Going-concern Assumptions
Depreciation
Unsecured Loan
International Financial Reporting Standards
22. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Acquisition
Net Loss
Chart of Accounts
Double Entry Accounting
23. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Measurement Principle
Trial balance
Time Period Assumptions
Audit
24. Temporary account used only in the closing process to which the balances of revenue and expense accounts (including any gains or losses) are transferred. Its balance is transferred to the capital account (or retained earnings for a corporation).
Cost-benefit Constraint
Journal
Posting
Income Summary
25. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Stockholders
Common Stock
Securities and Exchange Commission
Unearned Revenue
26. Items paid for in advance of receiving their benefits. Classified as assets.
NYSE (New York Stock Exchange)
Bookkeeping
Prepaid Expenses
Time Period Assumptions
27. Persons using accounting information who are not directly involved in running the organization.
SEC (Securites and Exchange Commision)
IPO
External Users
Reversing Entries
28. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Profit Margin
IPO
Recordkeeping
Audit
29. 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.
Mergers
Common Stock
Time Period Assumptions
Corporations
30. Excess of expenses over revenues for a period.
Net Loss
Common Stock
Time Period Assumptions
Unadjusted Trial Balance
31. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Operating Cycle
Post Closing Trial Balance
Common Stock
Ethical Dilemma
32. Length of time covered by financial statements; also called reporting period.
SMART Goal
Ethics
Equity
Accounting Period
33. Exchanges of economic value between one entity and another entity.
Income Statement
External Transactions
Time Period Assumptions
Risk Tolerance
34. Individuals or organizations that owe money.
Revenue Recognition Principle
Ethical Dilemma
Debtors
General Journal
35. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Audit
Cost Principle
Business Entity Assumption
Cash Basis Accounting
36. Area of accounting aimed mainly at serving external users.
Return on Assets
Corporation
Financial Accounting
Time Period Assumptions
37. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Shares
Accounting
Current Ratio
Chart of Accounts
38. 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
Post Closing Trial Balance
Ledger
Credit
39. Individuals or organizations entitled to receive payments
Creditors
Mergers
IRA (Individual Retirement Account)
Ledger
40. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Contra Account
Return
Operating Cycle
Post Closing Trial Balance
41. Happenings that both affect an organization's financial position and can be reliably measured.
Posting Reference Column
Corporation
Balance Sheet
Events
42. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Ethical Dilemma
Audit
Unclassified Balance Sheets
Financial Accounting
43. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Unadjusted Trial Balance
Bookkeeping
Accrued Expenses
Financial Accounting Standards Board
44. 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.
Securities
Partnership
CD (Certificate of Deposit)
Federal Reserve System
45. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Working Papers
Internal users
International Accounting Standards Board
Interim Financial Statements
46. Revenues earned in a period that both unrecorded and not yet received in cash (or other assets; adjusting entries for recording accrued revenues involve increasing assets and increasing revenues.
Net Loss
Unearned Revenues
Accrued Revenues
Debt Ratio
47. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accounting
Pro Forma Financial Statement
Closing process
Common Stock
48. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Financial Accounting Standards Board
Corporation
Ethical Dilemma
Sole Proprietorship
49. All purpose journal for recording the debits and credits of transactions and events.
Matching Principle
Source Documents
General Journal
Classified Balance Sheet
50. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Money Market Account
SMART Goal
Ledger
Classified Balance Sheet