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Test your basic knowledge |
DSST Principles Of Finance
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Subjects
:
dsst
,
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Owner Investment
Shares
Long Term Liabilities
Corporations
2. Income that is available after all of the essential financial commitments have been paid.
Managerial Accounting
Discretionary Income
Natural Business Years
Return on Assets
3. 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.
Accrual Basis Accounting
Shares
Equity
Mergers
4. Difference between total debits and total credits (including the beginning balance) for an account.
Temporary Accounts
Long Term Investments
Account Balance
Accounting Equation
5. List of accounts used by a company' includes and identification number for each account.
Managerial Accounting
Chart of Accounts
Credit
Recordkeeping
6. Owners of a corporation who usually receive dividends. Also called shareholders.
Stockholders
Corporation
Depreciation
Credit
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.
Fixed Expense
Natural Business Years
Reversing Entries
Accrued Expenses
8. Expenses that remain the same regardless of the circumstances.
Natural Business Years
Plant Assets
Fixed Expense
Accounting
9. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership
Passive Income
Ethics
Ledger
10. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Closing process
Equity
Internal users
Assets
11. 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
Current Assets
Stock
Shares
Sarbanes-Oxley Act (SOX)
12. 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
Closing process
Accounting Equation
Corporation
13. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Current Ratio
Current Assets
SMART Goal
Going-concern Assumptions
14. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Accrued Expenses
Long Term Investments
Adjusted Trial Balance
Cost-benefit Constraint
15. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting Reference Column
Common Stock
Varaiable Expense
Interim Financial Statements
16. Income from investments - including dividends - interest - or the sale of a property.
Portfolio Income
Generally Accepted Accounting Principles
Time Period Assumptions
CD (Certificate of Deposit)
17. Principle that assumes transactions and events can be expressed in money units.
Accounting Cycle
Monetary Unit Assumption
Depreciation
Source Documents
18. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Account
Reversing Entries
General Journal
Long Term Investments
19. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Unsecured Loan
Financial Accounting
Fiscal Year
Liabilities
20. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Journalizing
International Financial Reporting Standards
Stock
Depreciation
21. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Partnership
Book Value
Profit Margin
Classified Balance Sheet
22. Statements that show the effect of proposed transactions and events as if they had occurred.
Cash Basis Accounting
Pro Forma Financial Statement
Compound Journal Entries
Operating Cycle
23. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Depreciation
Assets
Account Balance
Ethics
24. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Source Documents
Trial balance
Unadjusted Trial Balance
Long Term Liabilities
25. Items paid for in advance of receiving their benefits. Classified as assets.
Going-concern Assumptions
Debit
Prepaid Expenses
Income Statement
26. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Recordkeeping
Corporation
Compound Journal Entries
Partnership
27. 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
Auditors
Owner Withdrawals
Posting Reference Column
28. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Interim Financial Statements
Permanent Accounts
Ponzi Scheme
Debit
29. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Assets
Sarbanes-Oxley Act (SOX)
Long Term Investments
Money Market Account
30. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Accounting Equation
Work Sheet
Current Assets
Posting
31. Assets put into the business by the owner.
Owner Investment
Journal
Federal Reserve System
Surplus
32. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Adjusting Entry
Deficit
Contra Account
Intangible assets
33. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Sole Propietorship
Present Value
Adjusted Trial Balance
Net Income
34. Report of changes in equity over a period; adjusted for increases and for decreases.
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35. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Cost-benefit Constraint
Managerial Accounting
Risk Tolerance
Adjusting Entry
36. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Ponzi Scheme
Post Closing Trial Balance
Full Disclosure Principle
Compound Journal Entries
37. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Fiscal Year
Secured Loan
Interim Financial Statements
Unsecured Loan
38. Gross increase in equity from a company's business activities that earn income.
Corporation
Partnership Agreement
Reversing Entries
Revenues
39. Record containing all accounts (with amounts) for a business.
Credit
Ledger
Accrued Expenses
Liabilities
40. A corporation's basic ownership share.
Interim Financial Statements
Posting
Common Stock
Unadjusted Trial Balance
41. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Temporary Accounts
Balance Sheet
Corporation
Compound Journal Entries
42. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accounting
SMART Goal
Accrued Expenses
Deficit
43. 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).
Expenses
Stockholders
Income Summary
Annual Financial Statements
44. The twelve month period that ends when a company's sales activities are at their lowest point.
Matching Principle
Portfolio Income
Natural Business Years
Debit
45. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Internal users
CD (Certificate of Deposit)
Unearned Revenues
Recordkeeping
46. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Accrued Revenues
Generally Accepted Accounting Principles
Passive Income
Money Market Account
47. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Accounting
Cash Basis Accounting
Debtors
Current Ratio
48. Independent group of full-time members responsible for setting accounting rules.
Compound Journal Entries
Book Value
Bonds
Financial Accounting Standards Board
49. Goals that are specific - measurable - attainable - realistic - and time bound.
SMART Goal
SEC (Securites and Exchange Commision)
Return on Assets
Current Ratio
50. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Time Period Assumptions
Equity
Accrual Basis Accounting
Financial Accounting Standards Board
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