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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. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Accounting Cycle
Depreciation
Acquisition
Full Disclosure Principle
2. Optional entries recorded at the beginning of a period that prepare the accounts for the usual journal entries as if adjusting entries had not occurred in the prior period.
Passive Income
Ledger
Reversing Entries
Accounting Equation
3. Individuals or organizations that owe money.
Partnership Agreement
Debtors
Journalizing
Posting Reference Column
4. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Net Income
Matching Principle (or Expense Recognition Principle)
Limited Liability Corporation
Statement of Owner's Equity
5. 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.
Ponzi Scheme
Internal users
CD (Certificate of Deposit)
Bailout
6. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Preferred Stock
T Account
Annual Financial Statements
NASDAQ
7. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Long Term Investments
Financial Accounting
Account
Bonds
8. Accounting information is based on cost with potential subsequent adjustments to fair value.
Measurement Principle
Federal Reserve System
Unadjusted Trial Balance
Internal transactions
9. 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
Debt Ratio
Straight-line Depreciation Method
Statement of Owner's Equity
10. Gross increase in equity from a company's business activities that earn income.
Permanent Accounts
Secured Loan
Revenues
Statement of Cash Flows
11. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Current Assets
Revenue Recognition Principle
Financial Accounting Standards Board
Accrued Expenses
12. Uncertainty about expected return.
Financial Accounting Standards Board
Passive Income
Accrued Expenses
Risk
13. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Equity
Corporation
Owner Withdrawals
Current Liabilities
14. Assets put into the business by the owner.
Common Stock
Deficit
Sarbanes-Oxley Act (SOX)
Owner Investment
15. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
NYSE (New York Stock Exchange)
General Journal
Unearned Revenues
Posting Reference Column
16. The principle prescribing that revenue is recognized when earned.
Materiality Constraint
General Journal
Revenue Recognition Principle
Mergers
17. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Expanded Accounting Equation
Recordkeeping
Debit
Revenue Recognition Principle
18. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Accounting Cycle
Plant Assets
Federal Reserve System
Liabilities
19. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Portfolio Income
Owner Withdrawals
Ledger
Full Disclosure Principle
20. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Interim Financial Statements
Account Balance
Recordkeeping
Financial Accounting Standards Board
21. Income that is available after all of the essential financial commitments have been paid.
Shareholders
Conceptual Framework
Permanent Accounts
Discretionary Income
22. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Internal transactions
Operating Cycle
Unearned Revenue
Income Summary
23. Independent group of full-time members responsible for setting accounting rules.
Income Statement
Financial Accounting Standards Board
Contra Account
Account
24. Report of changes in equity over a period; adjusted for increases and for decreases.
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25. Length of time covered by financial statements; also called reporting period.
Accounting Period
Statement of Owner's Equity
Bonds
Accounting Cycle
26. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Shares
Auditors
Time Period Assumptions
Adjusted Trial Balance
27. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
NASDAQ
Return
Assets
Fiscal Year
28. Area of accounting aimed mainly at serving external users.
Corporations
Financial Accounting
Current Assets
Partnership Agreement
29. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unearned Revenues
Unsecured Loan
Current Ratio
Stock
30. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Compound Journal Entries
Partnership
Time Period Assumptions
Bailout
31. 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
Sarbanes-Oxley Act (SOX)
Revenues
Credit
Post Closing Trial Balance
32. Rules that specify acceptable accounting practices.
General Journal
Matching Principle
Generally Accepted Accounting Principles
Cash Basis Accounting
33. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Accrued Revenues
Journal
Current Ratio
Current Assets
34. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
International Financial Reporting Standards
Acquisition
Debt Ratio
Debtors
35. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Profit Margin
NYSE (New York Stock Exchange)
Classified Balance Sheet
Ethical Dilemma
36. Persons using accounting information who are not directly involved in running the organization.
Revenues
External Users
SMART Goal
Unearned Revenues
37. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Contra Account
Matching Principle (or Expense Recognition Principle)
Varaiable Expense
Debtors
38. Assets pulled out of the business by the owner.
Securities
SEC (Securites and Exchange Commision)
Unadjusted Trial Balance
Owner Withdrawals
39. The money left over when income exceeds expenditure.
IRA (Individual Retirement Account)
Surplus
Partnership Agreement
Revenues
40. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Sole Proprietorship
Cost Principle
Financial Accounting Standards Board
Sole Propietorship
41. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Bookkeeping
Long Term Liabilities
Deficit
Intangible assets
42. 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.
Closing Entries
Plant Assets
Common Stock
Expanded Accounting Equation
43. Owners of a corporation who usually receive dividends. Also called shareholders.
Post Closing Trial Balance
Discretionary Income
Adjusted Trial Balance
Stockholders
44. Journal entries that affect at least three accounts.
Sole Propietorship
Matching Principle (or Expense Recognition Principle)
Measurement Principle
Compound Journal Entries
45. An expense that changes from period to perio - such as food or gasoline costs.
Plant Assets
Varaiable Expense
Long Term Investments
Risk Tolerance
46. Exchanges of economic value between one entity and another entity.
SEC (Securites and Exchange Commision)
External Transactions
Managerial Accounting
Business Entity Assumption
47. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
International Accounting Standards Board
Unsecured Loan
General Journal
SEC (Securites and Exchange Commision)
48. 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.
Passive Income
Full Disclosure Principle
Income Statement
Temporary Accounts
49. Business owned by a single person.
Accounting Period
Audit
Current Liabilities
Sole Propietorship
50. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Mergers
Audit
Accounting Equation
Events