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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 loan that is backed by collateral such as cars - houses - or other assets.
Secured Loan
Adjusting Entry
Interim Financial Statements
Securities and Exchange Commission
2. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Stockholders
Depreciation
Double Entry Accounting
Closing process
3. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Trial balance
Assets
Prepaid Expenses
Balance Column Account
4. Happenings that both affect an organization's financial position and can be reliably measured.
Events
Account
Financial Accounting
Chart of Accounts
5. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Matching Principle (or Expense Recognition Principle)
Income Summary
T Account
Posting Reference Column
6. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Managerial Accounting
Posting
Long Term Investments
Unclassified Balance Sheets
7. Business owned by a single person.
Sole Propietorship
Working Papers
Classified Balance Sheet
Ponzi Scheme
8. Assets put into the business by the owner.
Unadjusted Trial Balance
Return on Assets
Owner Investment
Accounting Equation
9. 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.
Book Value
Statement of Owner's Equity
Prepaid Expenses
Owner - Capital
10. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Account
Bookkeeping
Events
Going-concern Assumptions
11. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Natural Business Years
Net Income
Credit
Double Entry Accounting
12. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Credit
Income Statement
Corporation
Accounting Cycle
13. Excess of expenses over revenues for a period.
Liabilities
International Accounting Standards Board
International Financial Reporting Standards
Net Loss
14. Assets pulled out of the business by the owner.
Owner Withdrawals
Depreciation
Shareholders
Stock
15. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Working Papers
Balance Column Account
Prepaid Expenses
International Accounting Standards Board
16. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Passive Income
Portfolio Income
Current Ratio
Statement of Owner's Equity
17. 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.
Fiscal Year
Long Term Liabilities
Matching Principle
Matching Principle (or Expense Recognition Principle)
18. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Business Entity Assumption
Varaiable Expense
Expenses
Mergers
19. 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.
Depreciation
Income Statement
Account
Cost-benefit Constraint
20. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
CD (Certificate of Deposit)
Ethical Dilemma
Recordkeeping
Accrual Basis Accounting
21. The principle prescribing that revenue is recognized when earned.
Revenue Recognition Principle
Operating Cycle
Liabilities
Posting Reference Column
22. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
Events
Varaiable Expense
Income Summary
23. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
NASDAQ
Closing process
Straight-line Depreciation Method
Account
24. List of accounts used by a company' includes and identification number for each account.
Double Entry Accounting
Chart of Accounts
Ethics
Cost-benefit Constraint
25. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Owner Investment
Compound Journal Entries
Partnership Agreement
External Transactions
26. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Events
Statement of Cash Flows
Net Loss
Unearned Revenue
27. Accounting information is based on cost with potential subsequent adjustments to fair value.
Events
Internal users
Measurement Principle
Sarbanes-Oxley Act (SOX)
28. 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.
Audit
IPO
Managerial Accounting
International Financial Reporting Standards
29. Individuals or organizations entitled to receive payments
Unadjusted Trial Balance
Creditors
Accounting Equation
Cost Principle
30. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Accounting Cycle
Long Term Liabilities
T Account
Annual Financial Statements
31. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Intangible assets
Working Papers
Shareholders
Equity
32. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Book Value
Expenses
Current Assets
Passive Income
33. Individuals or organizations that owe money.
NYSE (New York Stock Exchange)
Fixed Expense
Debtors
Balance Sheet
34. 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.
Monetary Unit Assumption
NYSE (New York Stock Exchange)
Operating Cycle
Net Income
35. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Recordkeeping
SEC (Securites and Exchange Commision)
Accrual Basis Accounting
Current Liabilities
36. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Business Entity Assumption
Classified Balance Sheet
Deficit
Risk Tolerance
37. A tax deferred account that allows individuals to plan for their retirement.
Accounting Period
Bonds
IRA (Individual Retirement Account)
NASDAQ
38. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
Discretionary Income
Revenue Recognition Principle
SEC (Securites and Exchange Commision)
39. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Fixed Expense
Ethics
Fiscal Year
Adjusted Trial Balance
40. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership
Income Statement
Fixed Expense
Internal transactions
41. Business owned by two or more people.
Events
Partnership
NASDAQ
Income Statement
42. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Statement of Cash Flows
Unclassified Balance Sheets
Risk Tolerance
Contra Account
43. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
External Transactions
Plant Assets
Time Period Assumptions
Risk
44. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Monetary Unit Assumption
Fixed Expense
Profit Margin
Ledger
45. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Long Term Investments
Measurement Principle
Partnership
Common Stock
46. Exchanges of economic value between one entity and another entity.
Sarbanes-Oxley Act (SOX)
Intangible assets
Accounting
External Transactions
47. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Net Income
T Account
Classified Balance Sheet
Present Value
48. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Preferred Stock
Corporations
Events
Cost Principle
49. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accounting
Operating Cycle
Stock
Ethics
50. Business owned by one person that is not organized as a corporation.
Unearned Revenue
Measurement Principle
Sole Proprietorship
Income Summary