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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 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.
Creditors
Common Stock
Managerial Accounting
Shareholders
2. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Net Loss
Straight-line Depreciation Method
General Journal
Account
3. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Secured Loan
Accrued Revenues
Classified Balance Sheet
Posting Reference Column
4. Items paid for in advance of receiving their benefits. Classified as assets.
Revenue Recognition Principle
Debtors
Prepaid Expenses
Ponzi Scheme
5. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Time Period Assumptions
Going-concern Assumptions
Monetary Unit Assumption
SEC (Securites and Exchange Commision)
6. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Debt Ratio
Current Ratio
Fiscal Year
Income Summary
7. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Liabilities
Accounting Equation
Adjusting Entry
Cost-benefit Constraint
8. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Accrual Basis Accounting
Annual Financial Statements
Account Balance
Adjusting Entry
9. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Partnership
Journal
Pro Forma Financial Statement
International Financial Reporting Standards
10. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Partnership Agreement
Net Income
Discretionary Income
Balance Column Account
11. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Financial Accounting
SEC (Securites and Exchange Commision)
Temporary Accounts
Contra Account
12. Owners of a corporation who usually receive dividends. Also called shareholders.
Closing process
Stockholders
Partnership
Events
13. Persons using accounting information who are not directly involved in running the organization.
Ethical Dilemma
Securities
External Users
Depreciation
14. Loaning or giving money to a business in orer to save it from bankruptcy.
NASDAQ
Return
Bailout
Ledger
15. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Compound Journal Entries
General Journal
Financial Accounting
16. The first time a company sells shares of its stock to the public.
Measurement Principle
IPO
Events
Liabilities
17. Expenses that remain the same regardless of the circumstances.
Creditors
Fixed Expense
Balance Column Account
Accounting Cycle
18. 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).
Posting
Sole Propietorship
Liabilities
Income Summary
19. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting Reference Column
Debtors
Measurement Principle
CD (Certificate of Deposit)
20. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Net Loss
Liabilities
Money Market Account
Statement of Owner's Equity
21. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Partnership Agreement
Events
International Accounting Standards Board
Unadjusted Trial Balance
22. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Interim Financial Statements
CD (Certificate of Deposit)
Depreciation
Owner - Capital
23. Record containing all accounts (with amounts) for a business.
Sarbanes-Oxley Act (SOX)
Ledger
Post Closing Trial Balance
International Financial Reporting Standards
24. The central bank of the United States - with 12 Federal Reserve branch banks located in major cities throughout the nation. It helps to regulate the US monetary and banking system.
Accounting Period
Journalizing
Federal Reserve System
Intangible assets
25. 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
Fiscal Year
Depreciation
Profit Margin
Expanded Accounting Equation
26. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Securities
Stock
Discretionary Income
Current Ratio
27. Happenings that both affect an organization's financial position and can be reliably measured.
Common Stock
Events
International Accounting Standards Board
Varaiable Expense
28. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Cost Principle
Preferred Stock
Plant Assets
Acquisition
29. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Return on Assets
IPO
Accrued Expenses
Credit
30. Income that is available after all of the essential financial commitments have been paid.
Securities
Conceptual Framework
Unsecured Loan
Discretionary Income
31. 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
Intangible assets
Preferred Stock
Unsecured Loan
Balance Sheet
32. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Materiality Constraint
IRA (Individual Retirement Account)
Partnership Agreement
Debit
33. 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.
Owner - Capital
Audit
Partnership
Time Period Assumptions
34. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
International Financial Reporting Standards
Sarbanes-Oxley Act (SOX)
Time Period Assumptions
35. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Accounting
Fiscal Year
Current Ratio
Debtors
36. Report of changes in equity over a period; adjusted for increases and for decreases.
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37. The principle prescribing that revenue is recognized when earned.
Revenue Recognition Principle
Current Assets
Present Value
Matching Principle
38. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
Financial Accounting
Securities and Exchange Commission
Adjusted Trial Balance
39. Principle that assumes transactions and events can be expressed in money units.
Auditors
Ledger
Risk Tolerance
Monetary Unit Assumption
40. The money left over when income exceeds expenditure.
Monetary Unit Assumption
Pro Forma Financial Statement
Risk Tolerance
Surplus
41. 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)
Closing process
Bailout
Debit
42. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Federal Reserve System
Operating Cycle
Risk Tolerance
Profit Margin
43. 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.
Expense Recognition Principle
Business Entity Assumption
Source Documents
Money Market Account
44. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Journalizing
Owner Withdrawals
CD (Certificate of Deposit)
T Account
45. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Long Term Investments
Unsecured Loan
Permanent Accounts
Fixed Expense
46. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Closing process
Portfolio Income
Working Papers
Double Entry Accounting
47. Assets pulled out of the business by the owner.
Federal Reserve System
Owner Withdrawals
Financial Accounting Standards Board
Equity
48. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Posting
General Journal
Unadjusted Trial Balance
Owner Investment
49. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Time Period Assumptions
CD (Certificate of Deposit)
Statement of Owner's Equity
Current Ratio
50. Individuals or organizations that owe money.
Risk Tolerance
Working Papers
Debtors
Accounting Cycle