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DSST Principles Of Finance

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. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.






2. Area of accounting aimed mainly at serving external users.






3. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.






4. The combining of two or more comapnies into one larger company.






5. Entries recorded at the end of each accounting period to transfer end of period balances in revenue - gain - expense - loss - and withdrawal (dividend for a corporation) accounts to the capital account (to retain earnings for a corporation).






6. 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.






7. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.






8. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.






9. 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.






10. Analysis and report of an organization's accounting system - its records - and its reports using various tests.






11. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.






12. Rules that specify acceptable accounting practices.






13. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.






14. Independent group of full-time members responsible for setting accounting rules.






15. Obligations not due to be paid within one year or the operating cycle - whichever is longer.






16. Journal entry at the end of an accounting period to bring an asset or liability account to its proper amount and update the related expenses or revenue account.






17. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.






18. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.






19. A written framework to guide the development - preparation - and interpretation of financial accounting information.






20. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.






21. A tax deferred account that allows individuals to plan for their retirement.






22. Report of changes in equity over a period; adjusted for increases and for decreases.

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23. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.






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).






25. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.






26. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.






27. The money left over when income exceeds expenditure.






28. 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






29. Exchanges of economic value between one entity and another entity.






30. Record containing all accounts (with amounts) for a business.






31. A loan that is backed by collateral such as cars - houses - or other assets.






32. Expenses that remain the same regardless of the circumstances.






33. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.






34. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.






35. Persons using accounting information who are directly involved in managing the organization.






36. Excess of expenses over revenues for a period.






37. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.






38. Income that is available after all of the essential financial commitments have been paid.






39. Principle that assumes transactions and events can be expressed in money units.






40. Assets put into the business by the owner.






41. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.






42. Happenings that both affect an organization's financial position and can be reliably measured.






43. Difference between total debits and total credits (including the beginning balance) for an account.






44. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.






45. The value of a future cash steam discounted at the appropriate market interest rate.






46. Normal time between paying cash for merchandise or employee services and receiving cash from customers.






47. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.






48. Persons using accounting information who are not directly involved in running the organization.






49. The first time a company sells shares of its stock to the public.






50. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.







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