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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. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Classified Balance Sheet
Accrued Expenses
Debt Ratio
Balance Column Account
2. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Working Papers
Audit
Common Stock
Risk Tolerance
3. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Time Period Assumptions
Cost-benefit Constraint
Matching Principle (or Expense Recognition Principle)
Revenues
4. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Post Closing Trial Balance
Book Value
Straight-line Depreciation Method
Mergers
5. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Long Term Investments
Journal
Statement of Owner's Equity
Owner Withdrawals
6. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Interim Financial Statements
Ledger
Return on Assets
Post Closing Trial Balance
7. 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.
CD (Certificate of Deposit)
NASDAQ
Reversing Entries
Intangible assets
8. Principle that assumes transactions and events can be expressed in money units.
Work Sheet
Monetary Unit Assumption
Ledger
Debit
9. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Bonds
Creditors
Debit
Net Income
10. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Shareholders
Classified Balance Sheet
Posting
Closing process
11. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Current Liabilities
Passive Income
Generally Accepted Accounting Principles
Long Term Investments
12. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Account
SEC (Securites and Exchange Commision)
Passive Income
Recordkeeping
13. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting Reference Column
Plant Assets
Going-concern Assumptions
Cash Basis Accounting
14. 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.
Depreciation
Cost-benefit Constraint
Accrued Revenues
Net Income
15. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Interim Financial Statements
Matching Principle
Ethical Dilemma
Partnership Agreement
16. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Materiality Constraint
Shares
Source Documents
Balance Column Account
17. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Sole Proprietorship
Trial balance
Revenues
Accounting
18. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Credit
Closing process
International Accounting Standards Board
Accounting
19. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Source Documents
Bailout
Full Disclosure Principle
Accounting Cycle
20. The money left over when income exceeds expenditure.
Securities
Revenues
Surplus
Cost Principle
21. An expense that changes from period to perio - such as food or gasoline costs.
Audit
Varaiable Expense
Journal
Shareholders
22. Income that is available after all of the essential financial commitments have been paid.
Debtors
Shareholders
Discretionary Income
Liabilities
23. A loan that is backed by collateral such as cars - houses - or other assets.
Interim Financial Statements
Accounting Cycle
Balance Sheet
Secured Loan
24. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Materiality Constraint
Stock
Posting Reference Column
Money Market Account
25. Individuals or organizations that owe money.
Debtors
Current Liabilities
T Account
CD (Certificate of Deposit)
26. Business owned by one person that is not organized as a corporation.
Compound Journal Entries
Profit Margin
Income Statement
Sole Proprietorship
27. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Current Liabilities
Materiality Constraint
Classified Balance Sheet
Closing process
28. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Risk Tolerance
Liabilities
Surplus
Owner Withdrawals
29. Expenses that remain the same regardless of the circumstances.
Permanent Accounts
Materiality Constraint
Limited Liability Corporation
Fixed Expense
30. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Long Term Liabilities
Accrual Basis Accounting
Ethics
31. A corporation's basic ownership share.
Common Stock
NYSE (New York Stock Exchange)
Going-concern Assumptions
Fiscal Year
32. Happenings that both affect an organization's financial position and can be reliably measured.
Accounting Period
Balance Column Account
Adjusting Entry
Events
33. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Ethics
Sole Proprietorship
Securities
Double Entry Accounting
34. 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.
Generally Accepted Accounting Principles
Revenues
Financial Accounting
Federal Reserve System
35. A tax deferred account that allows individuals to plan for their retirement.
Adjusting Entry
IRA (Individual Retirement Account)
Shares
Portfolio Income
36. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Sole Proprietorship
Liabilities
Financial Accounting
Adjusted Trial Balance
37. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Assets
Post Closing Trial Balance
Sole Propietorship
Auditors
38. The first time a company sells shares of its stock to the public.
Accounting Equation
Cash Basis Accounting
Return
IPO
39. Report of changes in equity over a period; adjusted for increases and for decreases.
40. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Current Liabilities
Partnership
Federal Reserve System
Accounting Cycle
41. Individuals hired to review financial reports and information systems of organizations.
Net Loss
Post Closing Trial Balance
Debt Ratio
Auditors
42. 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).
Accrual Basis Accounting
Balance Sheet
Closing Entries
Monetary Unit Assumption
43. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accounting
Assets
Accrued Expenses
General Journal
44. 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.
Balance Column Account
Accounting Equation
Current Ratio
Liabilities
45. Income from investments - including dividends - interest - or the sale of a property.
Events
Portfolio Income
Closing process
Trial balance
46. Tool used to show the effects of transactions and events on individual accounts.
T Account
Monetary Unit Assumption
Partnership
Materiality Constraint
47. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Bonds
Acquisition
Partnership
Debt Ratio
48. Assets pulled out of the business by the owner.
Owner Withdrawals
Intangible assets
Fixed Expense
Current Assets
49. The NYSE was founded in 1792 and is the oldest and larvest securities market in the United States. it is located on Wall Street in New York.
NYSE (New York Stock Exchange)
General Journal
Intangible assets
Ethical Dilemma
50. 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.
Common Stock
Discretionary Income
Cash Basis Accounting
Bonds