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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. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Federal Reserve System
Discretionary Income
Accrued Revenues
Permanent Accounts
2. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Plant Assets
Trial balance
Fiscal Year
Debt Ratio
3. Debt securities that are issued by a borrower to raise capital . Bonds guarantee payments of the original amount borrowe plus interest and/or repayable on a fixed rate when the bond matures.
Liabilities
Work Sheet
Bonds
NYSE (New York Stock Exchange)
4. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Posting
Deficit
Profit Margin
Measurement Principle
5. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Net Loss
Revenues
Plant Assets
Intangible assets
6. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Unclassified Balance Sheets
Financial Accounting Standards Board
Full Disclosure Principle
Prepaid Expenses
7. Assets put into the business by the owner.
Accounting Cycle
Owner Investment
Sole Propietorship
Posting
8. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Unadjusted Trial Balance
Equity
Account
Credit
9. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Present Value
Plant Assets
Money Market Account
Debit
10. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Double Entry Accounting
Trial balance
Current Liabilities
Posting Reference Column
11. Happenings that both affect an organization's financial position and can be reliably measured.
Events
Trial balance
Posting Reference Column
Stockholders
12. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Shares
Account Balance
Owner Investment
Balance Sheet
13. 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.
Contra Account
Depreciation
Cost Principle
Common Stock
14. Exchanges of economic value between one entity and another entity.
External Transactions
Federal Reserve System
Shareholders
Materiality Constraint
15. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Operating Cycle
Accrual Basis Accounting
Passive Income
Contra Account
16. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Stock
Time Period Assumptions
Posting
Long Term Liabilities
17. 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.
Cost-benefit Constraint
Accrued Expenses
Equity
Preferred Stock
18. A loan that is backed by collateral such as cars - houses - or other assets.
Secured Loan
Partnership
Accrued Revenues
Shareholders
19. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Corporation
T Account
Internal transactions
Expenses
20. Independent group of full-time members responsible for setting accounting rules.
Creditors
Financial Accounting Standards Board
Internal transactions
Auditors
21. A tax deferred account that allows individuals to plan for their retirement.
IRA (Individual Retirement Account)
IPO
Net Loss
Shares
22. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Source Documents
Straight-line Depreciation Method
Varaiable Expense
International Accounting Standards Board
23. Uncertainty about expected return.
Corporations
Conceptual Framework
Risk
Portfolio Income
24. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Sarbanes-Oxley Act (SOX)
Measurement Principle
Shares
Accounting Period
25. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Unadjusted Trial Balance
Going-concern Assumptions
Managerial Accounting
Owner Investment
26. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Managerial Accounting
External Users
Business Entity Assumption
Financial Accounting Standards Board
27. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Adjusted Trial Balance
Bonds
SEC (Securites and Exchange Commision)
Secured Loan
28. The principle prescribing that revenue is recognized when earned.
Net Income
Owner Withdrawals
Statement of Cash Flows
Revenue Recognition Principle
29. Owners of a corporation who usually receive dividends. Also called shareholders.
Surplus
Stockholders
Closing Entries
Posting
30. 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.
Time Period Assumptions
Bailout
Adjusting Entry
Revenues
31. 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
Compound Journal Entries
NYSE (New York Stock Exchange)
Revenues
32. Area of accounting aimed mainly at serving external users.
Profit Margin
Financial Accounting
Long Term Investments
Revenues
33. 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.
Prepaid Expenses
Income Statement
Closing Entries
Mergers
34. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Return on Assets
Journalizing
Double Entry Accounting
Cost-benefit Constraint
35. 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.
Matching Principle
Equity
Unadjusted Trial Balance
Balance Column Account
36. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Long Term Liabilities
Cash Basis Accounting
Double Entry Accounting
Balance Column Account
37. Excess of expenses over revenues for a period.
Contra Account
CD (Certificate of Deposit)
Net Loss
Accrual Basis Accounting
38. The value of a future cash steam discounted at the appropriate market interest rate.
Debit
Liabilities
Present Value
International Accounting Standards Board
39. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Ledger
Assets
International Financial Reporting Standards
Partnership Agreement
40. List of accounts used by a company' includes and identification number for each account.
Long Term Liabilities
Partnership Agreement
Chart of Accounts
Owner Investment
41. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Sole Proprietorship
Source Documents
Varaiable Expense
Passive Income
42. Individuals or organizations entitled to receive payments
Creditors
Account
Natural Business Years
Stock
43. Expenses that remain the same regardless of the circumstances.
Classified Balance Sheet
Journalizing
Fixed Expense
Time Period Assumptions
44. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Internal transactions
Time Period Assumptions
Ledger
Accounting
45. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Full Disclosure Principle
Corporation
Current Ratio
Double Entry Accounting
46. 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).
Closing Entries
Partnership Agreement
Journalizing
Post Closing Trial Balance
47. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Straight-line Depreciation Method
Securities
Partnership
Unearned Revenue
48. Business owned by one person that is not organized as a corporation.
Prepaid Expenses
Post Closing Trial Balance
General Journal
Sole Proprietorship
49. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Measurement Principle
Expanded Accounting Equation
Recordkeeping
Limited Liability Corporation
50. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Straight-line Depreciation Method
Matching Principle (or Expense Recognition Principle)
Ethics
Debit