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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 meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Risk Tolerance
T Account
Account Balance
Limited Liability Corporation
2. 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.
Source Documents
International Financial Reporting Standards
Expense Recognition Principle
Owner Withdrawals
3. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Audit
Statement of Owner's Equity
Sole Proprietorship
Trial balance
4. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Portfolio Income
Managerial Accounting
Full Disclosure Principle
Expenses
5. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Equity
Chart of Accounts
Closing Entries
Permanent Accounts
6. 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.
Return on Assets
Reversing Entries
International Accounting Standards Board
IRA (Individual Retirement Account)
7. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Acquisition
Return on Assets
Corporations
Book Value
8. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Partnership
Statement of Cash Flows
Discretionary Income
Interim Financial Statements
9. The value of a future cash steam discounted at the appropriate market interest rate.
Auditors
Sarbanes-Oxley Act (SOX)
Posting Reference Column
Present Value
10. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Adjusted Trial Balance
IRA (Individual Retirement Account)
External Transactions
Interim Financial Statements
11. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Preferred Stock
Acquisition
Work Sheet
Classified Balance Sheet
12. 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).
Balance Column Account
Current Assets
CD (Certificate of Deposit)
Income Summary
13. 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
Statement of Owner's Equity
Cash Basis Accounting
Straight-line Depreciation Method
14. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting Reference Column
Fiscal Year
Stock
Matching Principle
15. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Internal users
Permanent Accounts
Current Liabilities
Balance Sheet
16. List of accounts used by a company' includes and identification number for each account.
Chart of Accounts
Net Income
Return on Assets
Current Liabilities
17. 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.
Corporations
Equity
Debit
General Journal
18. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Assets
Common Stock
Permanent Accounts
Fiscal Year
19. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Work Sheet
Monetary Unit Assumption
Bonds
Cost Principle
20. Expenses that remain the same regardless of the circumstances.
Pro Forma Financial Statement
Cost-benefit Constraint
Fixed Expense
Accounting Period
21. Statements that show the effect of proposed transactions and events as if they had occurred.
Pro Forma Financial Statement
Classified Balance Sheet
Matching Principle (or Expense Recognition Principle)
Statement of Cash Flows
22. Accounting information is based on cost with potential subsequent adjustments to fair value.
Credit
Time Period Assumptions
Current Assets
Measurement Principle
23. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Monetary Unit Assumption
Owner - Capital
International Financial Reporting Standards
Journal
24. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Accrual Basis Accounting
Cost-benefit Constraint
Matching Principle (or Expense Recognition Principle)
Working Papers
25. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Debt Ratio
Audit
Accrued Expenses
Recordkeeping
26. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Posting
Preferred Stock
Closing process
Monetary Unit Assumption
27. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Prepaid Expenses
Fiscal Year
Contra Account
Sarbanes-Oxley Act (SOX)
28. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Working Papers
Securities
NYSE (New York Stock Exchange)
Creditors
29. Individuals or organizations entitled to receive payments
Account
Bookkeeping
Credit
Creditors
30. A written framework to guide the development - preparation - and interpretation of financial accounting information.
SEC (Securites and Exchange Commision)
Audit
Conceptual Framework
Net Loss
31. 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).
Unadjusted Trial Balance
Closing Entries
Monetary Unit Assumption
Compound Journal Entries
32. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unclassified Balance Sheets
Unearned Revenue
Accounting Equation
Stockholders
33. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Balance Column Account
Ponzi Scheme
Audit
Partnership
34. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Post Closing Trial Balance
Account
Reversing Entries
IPO
35. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Balance Sheet
Going-concern Assumptions
Partnership
Expenses
36. The combining of two or more comapnies into one larger company.
Debt Ratio
Mergers
SMART Goal
Risk Tolerance
37. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Ethics
Cost-benefit Constraint
Surplus
Operating Cycle
38. Rules that specify acceptable accounting practices.
Assets
Pro Forma Financial Statement
Generally Accepted Accounting Principles
Stock
39. Tool used to show the effects of transactions and events on individual accounts.
T Account
Debit
Current Liabilities
Going-concern Assumptions
40. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Profit Margin
Interim Financial Statements
Sarbanes-Oxley Act (SOX)
Assets
41. A tax deferred account that allows individuals to plan for their retirement.
IRA (Individual Retirement Account)
Securities
Internal transactions
Fiscal Year
42. The money left over when income exceeds expenditure.
Closing process
Fixed Expense
Surplus
Sole Proprietorship
43. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Unclassified Balance Sheets
Portfolio Income
Income Summary
Annual Financial Statements
44. Owners of a corporation who usually receive dividends. Also called shareholders.
Prepaid Expenses
Stockholders
Chart of Accounts
Materiality Constraint
45. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Expanded Accounting Equation
Monetary Unit Assumption
Deficit
Compound Journal Entries
46. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Corporations
Operating Cycle
Accrual Basis Accounting
Return
47. All purpose journal for recording the debits and credits of transactions and events.
General Journal
Time Period Assumptions
Unclassified Balance Sheets
External Transactions
48. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Monetary Unit Assumption
Unearned Revenues
Events
Corporations
49. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
SEC (Securites and Exchange Commision)
Limited Liability Corporation
Unsecured Loan
Income Statement
50. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Business Entity Assumption
Monetary Unit Assumption
Present Value
Time Period Assumptions