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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 contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Partnership Agreement
Acquisition
Unclassified Balance Sheets
Shares
2. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Journalizing
Materiality Constraint
Long Term Investments
Accounting Period
3. 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.
Journal
Materiality Constraint
Discretionary Income
Expense Recognition Principle
4. 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)
Creditors
Assets
Net Loss
5. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Financial Accounting Standards Board
Monetary Unit Assumption
Post Closing Trial Balance
Matching Principle (or Expense Recognition Principle)
6. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Shares
Debt Ratio
Return
Annual Financial Statements
7. 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.
Present Value
Income Statement
Trial balance
Common Stock
8. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
SEC (Securites and Exchange Commision)
Straight-line Depreciation Method
Expense Recognition Principle
Current Ratio
9. A tax deferred account that allows individuals to plan for their retirement.
Long Term Investments
IRA (Individual Retirement Account)
Measurement Principle
Cash Basis Accounting
10. Individuals hired to review financial reports and information systems of organizations.
Natural Business Years
Double Entry Accounting
Auditors
Fixed Expense
11. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Book Value
Net Loss
Debit
Partnership
12. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
International Accounting Standards Board
Debt Ratio
Book Value
Prepaid Expenses
13. 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.
Statement of Owner's Equity
Unadjusted Trial Balance
Common Stock
Expense Recognition Principle
14. Income that is available after all of the essential financial commitments have been paid.
Posting
Discretionary Income
Classified Balance Sheet
Return on Assets
15. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Present Value
Unearned Revenue
Shareholders
Business Entity Assumption
16. Accounting information is based on cost with potential subsequent adjustments to fair value.
Measurement Principle
IPO
Liabilities
Long Term Liabilities
17. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Acquisition
Double Entry Accounting
Shareholders
Adjusting Entry
18. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Stock
Generally Accepted Accounting Principles
Straight-line Depreciation Method
Statement of Cash Flows
19. Expenses that remain the same regardless of the circumstances.
Book Value
Income Summary
Fixed Expense
Net Income
20. Items paid for in advance of receiving their benefits. Classified as assets.
Varaiable Expense
Going-concern Assumptions
Prepaid Expenses
Portfolio Income
21. Difference between total debits and total credits (including the beginning balance) for an account.
Net Loss
Double Entry Accounting
Account Balance
Pro Forma Financial Statement
22. Area of accounting aimed mainly at serving external users.
Financial Accounting
Long Term Liabilities
Current Ratio
Recordkeeping
23. Assets pulled out of the business by the owner.
Owner Withdrawals
Statement of Cash Flows
Account Balance
Financial Accounting Standards Board
24. Rules that specify acceptable accounting practices.
Income Statement
Risk Tolerance
Generally Accepted Accounting Principles
Securities and Exchange Commission
25. 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.
Interim Financial Statements
Creditors
Intangible assets
Bonds
26. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Current Assets
Corporations
Present Value
Accounting
27. Outflows or using up of assets as part of operations of business to generate sales.
Closing Entries
Partnership
Ethical Dilemma
Expenses
28. Statements that show the effect of proposed transactions and events as if they had occurred.
Creditors
Revenue Recognition Principle
Fiscal Year
Pro Forma Financial Statement
29. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Securities and Exchange Commission
Acquisition
Financial Accounting
Assets
30. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Assets
Full Disclosure Principle
Income Statement
Securities and Exchange Commission
31. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Bookkeeping
Full Disclosure Principle
Working Papers
Sole Propietorship
32. The twelve month period that ends when a company's sales activities are at their lowest point.
Audit
Sarbanes-Oxley Act (SOX)
Natural Business Years
Permanent Accounts
33. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Cash Basis Accounting
CD (Certificate of Deposit)
Business Entity Assumption
Long Term Liabilities
34. 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).
Income Summary
Financial Accounting Standards Board
NASDAQ
External Transactions
35. 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
Adjusting Entry
Bookkeeping
Book Value
36. 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
Cost Principle
Profit Margin
Income Statement
37. 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.
Measurement Principle
Equity
SEC (Securites and Exchange Commision)
Common Stock
38. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Sole Proprietorship
Unclassified Balance Sheets
Profit Margin
Cost Principle
39. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Federal Reserve System
Auditors
Expenses
Securities
40. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
SEC (Securites and Exchange Commision)
Risk Tolerance
Double Entry Accounting
Prepaid Expenses
41. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Long Term Liabilities
Ponzi Scheme
Sole Proprietorship
Deficit
42. Prescribes expenses to be reported in the same period as the revenues that were eared as a result of the expenses. Also called the Expense Recognition Principle.
Matching Principle
Accounting
Credit
Profit Margin
43. Persons using accounting information who are directly involved in managing the organization.
Unclassified Balance Sheets
Corporations
Internal users
Present Value
44. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Adjusted Trial Balance
Balance Sheet
Owner - Capital
Depreciation
45. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Permanent Accounts
Debt Ratio
Plant Assets
Time Period Assumptions
46. Activities within an organization that can affect the accounting equation.
Monetary Unit Assumption
Internal transactions
Bonds
Permanent Accounts
47. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Closing Entries
Expense Recognition Principle
Owner Investment
Operating Cycle
48. The combining of two or more comapnies into one larger company.
Partnership
Varaiable Expense
Assets
Mergers
49. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Cash Basis Accounting
Temporary Accounts
Depreciation
Source Documents
50. Uncertainty about expected return.
Accounting Period
Sarbanes-Oxley Act (SOX)
Risk
Common Stock