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Test your basic knowledge |
DSST Principles Of Finance
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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. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Risk Tolerance
Acquisition
Going-concern Assumptions
Closing process
2. The first time a company sells shares of its stock to the public.
IPO
Natural Business Years
Fiscal Year
Long Term Investments
3. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Long Term Liabilities
Accrued Revenues
Mergers
Balance Sheet
4. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Account Balance
Trial balance
Natural Business Years
Accrual Basis Accounting
5. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Chart of Accounts
Owner Investment
Account
Pro Forma Financial Statement
6. Persons using accounting information who are not directly involved in running the organization.
Chart of Accounts
General Journal
External Users
Passive Income
7. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Shares
Corporations
Financial Accounting
Money Market Account
8. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Reversing Entries
Annual Financial Statements
Ethical Dilemma
Owner Withdrawals
9. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Secured Loan
Return on Assets
Post Closing Trial Balance
Unclassified Balance Sheets
10. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
NYSE (New York Stock Exchange)
Risk Tolerance
Source Documents
Recordkeeping
11. A loan that is backed by collateral such as cars - houses - or other assets.
Business Entity Assumption
Journal
Limited Liability Corporation
Secured Loan
12. Journal entries that affect at least three accounts.
Unearned Revenues
Deficit
Income Statement
Compound Journal Entries
13. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Time Period Assumptions
Ledger
Preferred Stock
Operating Cycle
14. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Compound Journal Entries
Unearned Revenue
Operating Cycle
Federal Reserve System
15. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Cash Basis Accounting
Common Stock
Fiscal Year
Full Disclosure Principle
16. Independent group of full-time members responsible for setting accounting rules.
CD (Certificate of Deposit)
Financial Accounting Standards Board
Depreciation
Passive Income
17. 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.
Audit
Generally Accepted Accounting Principles
Income Statement
Net Income
18. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Cost Principle
Time Period Assumptions
Bailout
SMART Goal
19. 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).
Current Assets
Income Summary
Closing Entries
Stock
20. Excess of expenses over revenues for a period.
Ethical Dilemma
General Journal
Net Loss
Materiality Constraint
21. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Events
Time Period Assumptions
Securities
Balance Sheet
22. 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.
Chart of Accounts
Accrued Revenues
Unearned Revenues
Natural Business Years
23. The principle prescribing that revenue is recognized when earned.
Working Papers
Partnership
Long Term Liabilities
Revenue Recognition Principle
24. Report of changes in equity over a period; adjusted for increases and for decreases.
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25. The twelve month period that ends when a company's sales activities are at their lowest point.
Closing Entries
Sole Propietorship
Net Income
Natural Business Years
26. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
T Account
Return on Assets
Intangible assets
Limited Liability Corporation
27. Persons using accounting information who are directly involved in managing the organization.
NASDAQ
Expenses
Internal users
Contra Account
28. 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.
Bonds
Audit
Internal users
Materiality Constraint
29. 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.
Reversing Entries
Corporations
Expense Recognition Principle
Ponzi Scheme
30. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
SEC (Securites and Exchange Commision)
Classified Balance Sheet
Bonds
Unsecured Loan
31. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Sarbanes-Oxley Act (SOX)
Internal transactions
Ethical Dilemma
Time Period Assumptions
32. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Interim Financial Statements
Reversing Entries
Internal transactions
Book Value
33. Owners of a corporation who usually receive dividends. Also called shareholders.
Return
SMART Goal
Present Value
Stockholders
34. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Contra Account
Return on Assets
Expenses
Annual Financial Statements
35. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accounting
Expanded Accounting Equation
External Users
Cost-benefit Constraint
36. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Audit
Surplus
Return on Assets
Depreciation
37. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
International Accounting Standards Board
Measurement Principle
Classified Balance Sheet
Sarbanes-Oxley Act (SOX)
38. Creditors' claims on an organization's assets; involves a probable future payment of assets - products - or services that a company is obligated to make due to past transactions or events.
Bonds
Assets
Preferred Stock
Liabilities
39. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
International Financial Reporting Standards
Measurement Principle
Profit Margin
Shares
40. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Expense Recognition Principle
Classified Balance Sheet
Journal
Debt Ratio
41. Monies (or sums of money) received from an investment; often in percent form.
Business Entity Assumption
Return
Accounting
Ethics
42. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
IPO
Partnership Agreement
Sole Proprietorship
Securities and Exchange Commission
43. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Posting
SMART Goal
Long Term Liabilities
Revenue Recognition Principle
44. Gross increase in equity from a company's business activities that earn income.
Trial balance
Credit
T Account
Revenues
45. Rules that specify acceptable accounting practices.
NYSE (New York Stock Exchange)
Matching Principle (or Expense Recognition Principle)
Internal transactions
Generally Accepted Accounting Principles
46. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Mergers
Generally Accepted Accounting Principles
Expense Recognition Principle
SEC (Securites and Exchange Commision)
47. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Secured Loan
Statement of Cash Flows
Unclassified Balance Sheets
Debit
48. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Pro Forma Financial Statement
Financial Accounting
Sole Propietorship
49. Individuals or organizations that owe money.
Debtors
Sole Proprietorship
Balance Sheet
Matching Principle (or Expense Recognition Principle)
50. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Secured Loan
Balance Sheet
Time Period Assumptions
Internal transactions