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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. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Intangible assets
Internal transactions
Preferred Stock
Work Sheet
2. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Bailout
Operating Cycle
Income Statement
Internal users
3. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Owner Investment
Depreciation
Managerial Accounting
Balance Column Account
4. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Book Value
Fiscal Year
Expanded Accounting Equation
Risk Tolerance
5. 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.
Going-concern Assumptions
Common Stock
External Users
Account Balance
6. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Internal transactions
Net Income
International Financial Reporting Standards
Source Documents
7. A tax deferred account that allows individuals to plan for their retirement.
Return on Assets
Closing process
IRA (Individual Retirement Account)
Varaiable Expense
8. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Account
Book Value
Trial balance
Unsecured Loan
9. Accounting information is based on cost with potential subsequent adjustments to fair value.
Passive Income
Posting
Net Loss
Measurement Principle
10. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Accrual Basis Accounting
Shareholders
Journalizing
Auditors
11. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
CD (Certificate of Deposit)
Stock
Cash Basis Accounting
Debit
12. Individuals or organizations entitled to receive payments
Accounting Cycle
Creditors
Varaiable Expense
CD (Certificate of Deposit)
13. 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.
Statement of Owner's Equity
Accrued Revenues
Federal Reserve System
Unearned Revenue
14. Process of recording transactions in a journal.
Journalizing
Matching Principle
Expenses
Posting Reference Column
15. Items paid for in advance of receiving their benefits. Classified as assets.
Income Statement
Depreciation
Profit Margin
Prepaid Expenses
16. Owners of a corporation who usually receive dividends. Also called stockholders.
Acquisition
Partnership Agreement
Shareholders
Reversing Entries
17. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Money Market Account
Income Summary
IPO
Acquisition
18. 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
Matching Principle (or Expense Recognition Principle)
Income Summary
Current Liabilities
19. Owners of a corporation who usually receive dividends. Also called shareholders.
NASDAQ
Stockholders
External Users
Account
20. Individuals or organizations that owe money.
Debit
Debtors
Business Entity Assumption
Annual Financial Statements
21. Individuals hired to review financial reports and information systems of organizations.
Money Market Account
Ponzi Scheme
Auditors
Accrual Basis Accounting
22. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Conceptual Framework
Measurement Principle
External Transactions
Permanent Accounts
23. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Debtors
Owner Withdrawals
Shareholders
24. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting Reference Column
Sarbanes-Oxley Act (SOX)
Interim Financial Statements
Corporations
25. The first time a company sells shares of its stock to the public.
IPO
Bailout
Assets
Financial Accounting
26. Gross increase in equity from a company's business activities that earn income.
Accounting Cycle
IRA (Individual Retirement Account)
Bonds
Revenues
27. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Post Closing Trial Balance
Partnership Agreement
International Accounting Standards Board
Permanent Accounts
28. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Current Liabilities
Time Period Assumptions
Post Closing Trial Balance
Expenses
29. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
IPO
Financial Accounting Standards Board
Balance Sheet
Full Disclosure Principle
30. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Secured Loan
External Transactions
Audit
31. Persons using accounting information who are directly involved in managing the organization.
Current Liabilities
Work Sheet
Present Value
Internal users
32. Length of time covered by financial statements; also called reporting period.
Risk Tolerance
Fiscal Year
Financial Accounting
Accounting Period
33. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Current Assets
Cash Basis Accounting
Cost Principle
Cost-benefit Constraint
34. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Net Loss
Current Liabilities
Events
Ethics
35. Difference between total debits and total credits (including the beginning balance) for an account.
Unearned Revenue
Straight-line Depreciation Method
Materiality Constraint
Account Balance
36. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Time Period Assumptions
Measurement Principle
SEC (Securites and Exchange Commision)
SMART Goal
37. Prescribes expenses to be reported in the same period as the revenues that were eared as a result of the expenses. Also called the Matching Principle.
Prepaid Expenses
Secured Loan
International Accounting Standards Board
Expense Recognition Principle
38. 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.
Working Papers
International Financial Reporting Standards
Partnership Agreement
Balance Sheet
39. 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
Prepaid Expenses
CD (Certificate of Deposit)
NASDAQ
Closing process
40. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Temporary Accounts
Journalizing
Unadjusted Trial Balance
Unclassified Balance Sheets
41. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Current Ratio
Varaiable Expense
Debtors
Cash Basis Accounting
42. 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
Accounting
Cash Basis Accounting
Preferred Stock
Ledger
43. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Closing process
Corporation
Financial Accounting
Owner - Capital
44. Assets pulled out of the business by the owner.
Owner Withdrawals
Recordkeeping
Assets
Permanent Accounts
45. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Natural Business Years
Intangible assets
Risk Tolerance
Shares
46. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Equity
Limited Liability Corporation
Balance Column Account
IRA (Individual Retirement Account)
47. Report of changes in equity over a period; adjusted for increases and for decreases.
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48. 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.
Current Assets
Annual Financial Statements
Money Market Account
Ponzi Scheme
49. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Profit Margin
Events
Financial Accounting Standards Board
Natural Business Years
50. 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
Common Stock
Sarbanes-Oxley Act (SOX)
General Journal
Credit