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DSST Principles Of Finance
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Subjects
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dsst
,
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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study here
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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. Individuals hired to review financial reports and information systems of organizations.
Income Statement
Accounting Period
T Account
Auditors
2. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Full Disclosure Principle
Income Statement
Events
Bookkeeping
3. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Auditors
Audit
Debit
Posting
4. 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.
Expense Recognition Principle
External Transactions
Owner - Capital
Journalizing
5. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Accounting Period
Unsecured Loan
General Journal
Working Papers
6. Persons using accounting information who are not directly involved in running the organization.
External Users
Owner Investment
Unearned Revenues
Varaiable Expense
7. 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
Pro Forma Financial Statement
Common Stock
Sarbanes-Oxley Act (SOX)
Materiality Constraint
8. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Long Term Liabilities
Partnership
Full Disclosure Principle
9. Monies (or sums of money) received from an investment; often in percent form.
Return
International Financial Reporting Standards
Current Ratio
Accounting Cycle
10. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Account Balance
SEC (Securites and Exchange Commision)
Cost-benefit Constraint
Shares
11. A corporation's basic ownership share.
Adjusted Trial Balance
Common Stock
Partnership
Trial balance
12. 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.
Time Period Assumptions
IPO
Mergers
Reversing Entries
13. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Income Summary
Cost-benefit Constraint
Federal Reserve System
Posting
14. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Reversing Entries
Bailout
Credit
Events
15. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Surplus
Audit
Secured Loan
16. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Accounting Period
Unearned Revenues
Revenues
Double Entry Accounting
17. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Net Loss
Unearned Revenues
Going-concern Assumptions
Shares
18. A tax deferred account that allows individuals to plan for their retirement.
Acquisition
IRA (Individual Retirement Account)
Secured Loan
Debtors
19. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Closing Entries
Long Term Liabilities
Current Ratio
Present Value
20. Uncertainty about expected return.
Interim Financial Statements
Risk
Balance Sheet
Debt Ratio
21. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Cash Basis Accounting
Intangible assets
Return
Statement of Cash Flows
22. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Fiscal Year
International Financial Reporting Standards
Accounting Period
Debtors
23. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Time Period Assumptions
Stockholders
Closing process
Long Term Investments
24. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Unearned Revenues
Closing process
Business Entity Assumption
Unearned Revenue
25. Rules that specify acceptable accounting practices.
Generally Accepted Accounting Principles
Accrued Expenses
Balance Column Account
Conceptual Framework
26. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Partnership Agreement
Money Market Account
Accrued Expenses
Matching Principle
27. Income that is available after all of the essential financial commitments have been paid.
Unearned Revenues
Account
Discretionary Income
Cost-benefit Constraint
28. Assets = Liabilities + Equity; Equity equals [Owner capital - owner withdrawal + revenue - expenses] for a non-corporation; Equity equals [Contributed capital - retained earnings + revenue - expenses] for a corporation where dividends are subtracted
Business Entity Assumption
Expanded Accounting Equation
Present Value
External Users
29. 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.
Corporation
Ponzi Scheme
SEC (Securites and Exchange Commision)
Time Period Assumptions
30. Business owned by two or more people.
Account Balance
Liabilities
Securities and Exchange Commission
Partnership
31. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Balance Column Account
Time Period Assumptions
Limited Liability Corporation
Business Entity Assumption
32. 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
Passive Income
Stock
Surplus
33. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Plant Assets
NYSE (New York Stock Exchange)
Annual Financial Statements
Operating Cycle
34. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Annual Financial Statements
Owner Withdrawals
Balance Sheet
Passive Income
35. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Credit
Posting Reference Column
Source Documents
Liabilities
36. The first time a company sells shares of its stock to the public.
Compound Journal Entries
Operating Cycle
IPO
Adjusted Trial Balance
37. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Intangible assets
Recordkeeping
Auditors
Time Period Assumptions
38. Exchanges of economic value between one entity and another entity.
External Transactions
Adjusting Entry
Balance Sheet
Creditors
39. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Long Term Investments
Pro Forma Financial Statement
Intangible assets
Posting Reference Column
40. 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.
Reversing Entries
Income Statement
Unearned Revenue
Expenses
41. Assets put into the business by the owner.
Mergers
Owner Investment
Matching Principle (or Expense Recognition Principle)
Managerial Accounting
42. 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.
Common Stock
Journalizing
Surplus
Unadjusted Trial Balance
43. Tool used to show the effects of transactions and events on individual accounts.
Owner Investment
Common Stock
T Account
Accounting
44. 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.
Book Value
Bonds
Passive Income
Sarbanes-Oxley Act (SOX)
45. Individuals or organizations that owe money.
Time Period Assumptions
Bailout
Closing process
Debtors
46. All purpose journal for recording the debits and credits of transactions and events.
Bailout
Working Papers
General Journal
Discretionary Income
47. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Post Closing Trial Balance
Varaiable Expense
Shares
Return on Assets
48. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Stock
T Account
Corporation
Posting Reference Column
49. Business owned by a single person.
Mergers
Going-concern Assumptions
Sole Propietorship
Accrued Expenses
50. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Time Period Assumptions
Deficit
Federal Reserve System
Work Sheet
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