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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. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Unsecured Loan
Pro Forma Financial Statement
Balance Sheet
Cost Principle
2. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Time Period Assumptions
Source Documents
Accounting
Recordkeeping
3. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Double Entry Accounting
Common Stock
Creditors
Permanent Accounts
4. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Sole Proprietorship
Balance Column Account
Credit
Expense Recognition Principle
5. Exchanges of economic value between one entity and another entity.
Revenues
Accounting Equation
External Transactions
Bookkeeping
6. Individuals or organizations entitled to receive payments
Creditors
Corporations
Time Period Assumptions
Full Disclosure Principle
7. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Partnership
Debt Ratio
Unclassified Balance Sheets
Compound Journal Entries
8. Owners of a corporation who usually receive dividends. Also called shareholders.
Stockholders
Current Ratio
Bookkeeping
Liabilities
9. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Source Documents
Recordkeeping
Net Loss
Revenue Recognition Principle
10. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Present Value
Journal
Temporary Accounts
Accounting Equation
11. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Discretionary Income
Debit
Expanded Accounting Equation
Reversing Entries
12. 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
Income Summary
Going-concern Assumptions
Matching Principle
13. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Permanent Accounts
Acquisition
Post Closing Trial Balance
Financial Accounting Standards Board
14. Independent group of full-time members responsible for setting accounting rules.
Closing Entries
Owner Withdrawals
Financial Accounting Standards Board
Limited Liability Corporation
15. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Closing Entries
Surplus
Annual Financial Statements
Bailout
16. Individuals hired to review financial reports and information systems of organizations.
Equity
Auditors
SMART Goal
Financial Accounting Standards Board
17. The principle prescribing that revenue is recognized when earned.
Revenue Recognition Principle
Expense Recognition Principle
Reversing Entries
Risk Tolerance
18. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Unearned Revenue
Common Stock
Monetary Unit Assumption
Securities and Exchange Commission
19. A corporation's basic ownership share.
Owner Withdrawals
Owner Investment
Common Stock
Expense Recognition Principle
20. Gross increase in equity from a company's business activities that earn income.
Materiality Constraint
Bailout
Revenues
Auditors
21. 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.
Federal Reserve System
Money Market Account
Recordkeeping
Acquisition
22. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Corporations
Return on Assets
Debit
Preferred Stock
23. Income from investments - including dividends - interest - or the sale of a property.
Portfolio Income
Natural Business Years
Net Loss
Long Term Liabilities
24. 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.
Portfolio Income
Matching Principle (or Expense Recognition Principle)
Accrued Revenues
Temporary Accounts
25. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
Closing process
Credit
Surplus
26. An investment scam that uses the assets from new investors to make payments to older investors. Named after Charles Ponzi who used the technique in the early 1900s to defraud thousands of investors.
Revenue Recognition Principle
Preferred Stock
Ponzi Scheme
Shareholders
27. The twelve month period that ends when a company's sales activities are at their lowest point.
Unclassified Balance Sheets
Natural Business Years
Creditors
Measurement Principle
28. 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.
Accrued Revenues
Straight-line Depreciation Method
Owner - Capital
Return
29. A loan that is backed by collateral such as cars - houses - or other assets.
SMART Goal
Secured Loan
Risk
Operating Cycle
30. Business owned by one person that is not organized as a corporation.
Generally Accepted Accounting Principles
Owner Withdrawals
Time Period Assumptions
Sole Proprietorship
31. 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
Matching Principle (or Expense Recognition Principle)
Acquisition
Auditors
Sarbanes-Oxley Act (SOX)
32. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Current Assets
Partnership
Long Term Liabilities
Fixed Expense
33. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Internal users
Sarbanes-Oxley Act (SOX)
Ethical Dilemma
Plant Assets
34. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Journalizing
Bookkeeping
Journal
Intangible assets
35. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Adjusting Entry
Business Entity Assumption
Shareholders
Profit Margin
36. 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
Portfolio Income
Preferred Stock
Full Disclosure Principle
Fixed Expense
37. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Unsecured Loan
Acquisition
Net Income
Debt Ratio
38. Individuals or organizations that owe money.
Expenses
Debtors
Closing Entries
Securities
39. The money left over when income exceeds expenditure.
Plant Assets
Expanded Accounting Equation
Surplus
Liabilities
40. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Passive Income
Annual Financial Statements
Owner - Capital
SEC (Securites and Exchange Commision)
41. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Posting Reference Column
Discretionary Income
Securities
Working Papers
42. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Sole Proprietorship
Liabilities
Journal
Bailout
43. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
NASDAQ
Acquisition
Temporary Accounts
Post Closing Trial Balance
44. 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
Sole Propietorship
NASDAQ
Current Ratio
Secured Loan
45. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Conceptual Framework
Double Entry Accounting
Trial balance
Cash Basis Accounting
46. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Contra Account
Materiality Constraint
Stock
Cost-benefit Constraint
47. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Financial Accounting Standards Board
Unearned Revenues
Internal users
Mergers
48. Uncertainty about expected return.
Statement of Cash Flows
SMART Goal
Accrued Expenses
Risk
49. 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.
Double Entry Accounting
Income Statement
Preferred Stock
Ethics
50. Excess of expenses over revenues for a period.
External Transactions
International Accounting Standards Board
Book Value
Net Loss