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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. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Cost Principle
Posting Reference Column
Accrued Expenses
Time Period Assumptions
2. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Matching Principle (or Expense Recognition Principle)
Contra Account
Portfolio Income
Surplus
3. The money left over when income exceeds expenditure.
Surplus
Common Stock
Risk
Return on Assets
4. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Intangible assets
Equity
Matching Principle (or Expense Recognition Principle)
Prepaid Expenses
5. 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
Sarbanes-Oxley Act (SOX)
Auditors
Journal
Corporations
6. Record containing all accounts (with amounts) for a business.
Ledger
Audit
Return
Accounting Period
7. Business owned by two or more people.
International Accounting Standards Board
Cost-benefit Constraint
Partnership
Liabilities
8. Exchanges of economic value between one entity and another entity.
Pro Forma Financial Statement
External Transactions
Debit
Creditors
9. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Natural Business Years
Post Closing Trial Balance
Passive Income
Accounting Cycle
10. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Business Entity Assumption
Unsecured Loan
Interim Financial Statements
Depreciation
11. 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).
Acquisition
Closing Entries
Balance Column Account
Unsecured Loan
12. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Audit
Securities and Exchange Commission
Compound Journal Entries
Securities
13. 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.
NYSE (New York Stock Exchange)
Income Statement
Net Income
Matching Principle
14. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Debit
Recordkeeping
Straight-line Depreciation Method
Adjusted Trial Balance
15. The twelve month period that ends when a company's sales activities are at their lowest point.
Working Papers
Account
Double Entry Accounting
Natural Business Years
16. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accounting
Partnership
Liabilities
Auditors
17. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Stock
Contra Account
Trial balance
Managerial Accounting
18. A loan that is backed by collateral such as cars - houses - or other assets.
Secured Loan
NASDAQ
Work Sheet
Business Entity Assumption
19. 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.
Shares
Bonds
Present Value
Audit
20. 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.
Expanded Accounting Equation
Permanent Accounts
Federal Reserve System
Double Entry Accounting
21. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Ledger
Long Term Liabilities
Return on Assets
Compound Journal Entries
22. 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.
Posting Reference Column
Internal transactions
Ethical Dilemma
Income Statement
23. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Owner Withdrawals
NASDAQ
Current Assets
General Journal
24. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Events
Post Closing Trial Balance
Ethical Dilemma
Cash Basis Accounting
25. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Ethics
Passive Income
Balance Sheet
Stockholders
26. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Acquisition
Owner Withdrawals
Money Market Account
Debit
27. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Adjusted Trial Balance
Securities
Interim Financial Statements
International Financial Reporting Standards
28. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Shares
Net Loss
Portfolio Income
T Account
29. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Book Value
Classified Balance Sheet
NYSE (New York Stock Exchange)
Current Ratio
30. Monies (or sums of money) received from an investment; often in percent form.
Return
Straight-line Depreciation Method
Fixed Expense
Chart of Accounts
31. 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.
Events
Common Stock
Debt Ratio
Income Summary
32. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Money Market Account
Accrued Revenues
Conceptual Framework
Ethical Dilemma
33. Length of time covered by financial statements; also called reporting period.
Money Market Account
Double Entry Accounting
Accounting Period
Closing Entries
34. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Statement of Cash Flows
Trial balance
Permanent Accounts
Double Entry Accounting
35. Rules that specify acceptable accounting practices.
Book Value
Creditors
Generally Accepted Accounting Principles
Net Income
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
Plant Assets
Owner Investment
Preferred Stock
Book Value
37. The first time a company sells shares of its stock to the public.
Expense Recognition Principle
Return
IPO
Financial Accounting
38. Accounting standards set by the IASB which aim to develop a single set of global standards - to promote those standards - and converge national and international standards globally.
Balance Column Account
Accounting Cycle
Federal Reserve System
International Financial Reporting Standards
39. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Unadjusted Trial Balance
Annual Financial Statements
Accounting
Ponzi Scheme
40. Persons using accounting information who are directly involved in managing the organization.
Internal users
Matching Principle (or Expense Recognition Principle)
Accounting
Ethics
41. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Liabilities
Annual Financial Statements
Expense Recognition Principle
Creditors
42. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Bookkeeping
SEC (Securites and Exchange Commision)
Auditors
Time Period Assumptions
43. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Partnership Agreement
Accounting Cycle
Posting
Contra Account
44. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Passive Income
Ethics
Owner Withdrawals
Annual Financial Statements
45. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Posting
Preferred Stock
SEC (Securites and Exchange Commision)
General Journal
46. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Cost-benefit Constraint
Time Period Assumptions
T Account
Journal
47. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Materiality Constraint
International Accounting Standards Board
Acquisition
Chart of Accounts
48. A corporation's basic ownership share.
Common Stock
Ethical Dilemma
Posting
Sole Proprietorship
49. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Partnership
Double Entry Accounting
Auditors
Stock
50. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Long Term Investments
Operating Cycle
IPO
Trial balance