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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 system that recognizes revenues when cash is received and records expenses when cash is paid.
Long Term Investments
Unsecured Loan
Cash Basis Accounting
Audit
2. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Bookkeeping
Working Papers
Depreciation
Liabilities
3. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Ethical Dilemma
Trial balance
Closing Entries
NYSE (New York Stock Exchange)
4. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern Assumptions
Full Disclosure Principle
Discretionary Income
Prepaid Expenses
5. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Partnership Agreement
International Accounting Standards Board
Financial Accounting
Accounting Cycle
6. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Monetary Unit Assumption
Straight-line Depreciation Method
Interim Financial Statements
Revenue Recognition Principle
7. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Working Papers
Equity
Corporation
Balance Column Account
8. Rules that specify acceptable accounting practices.
Generally Accepted Accounting Principles
Conceptual Framework
Owner Investment
Income Statement
9. An expense that changes from period to perio - such as food or gasoline costs.
Financial Accounting Standards Board
Working Papers
Varaiable Expense
Risk Tolerance
10. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Profit Margin
Passive Income
Assets
Equity
11. A loan that is backed by collateral such as cars - houses - or other assets.
Accrued Expenses
Secured Loan
Working Papers
Unclassified Balance Sheets
12. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Full Disclosure Principle
Statement of Cash Flows
Shareholders
Assets
13. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
NYSE (New York Stock Exchange)
Adjusting Entry
Permanent Accounts
Natural Business Years
14. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Passive Income
Cost-benefit Constraint
Double Entry Accounting
Bailout
15. Independent group of full-time members responsible for setting accounting rules.
Assets
Current Liabilities
Financial Accounting Standards Board
Shareholders
16. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Limited Liability Corporation
Owner - Capital
Income Summary
Intangible assets
17. Persons using accounting information who are directly involved in managing the organization.
Internal users
Measurement Principle
Natural Business Years
Chart of Accounts
18. Area of accounting aimed mainly at serving external users.
Financial Accounting
Profit Margin
Common Stock
Account
19. Length of time covered by financial statements; also called reporting period.
Assets
Accounting Period
Bookkeeping
Source Documents
20. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Accrued Expenses
Unearned Revenues
International Accounting Standards Board
Account Balance
21. Creditors' claims on an organization's assets; involves a probable future payment of assets - products - or services that a company is obligated to make due to past transactions or events.
Passive Income
Liabilities
Accrual Basis Accounting
Matching Principle (or Expense Recognition Principle)
22. Persons using accounting information who are not directly involved in running the organization.
Credit
External Users
Present Value
Book Value
23. Happenings that both affect an organization's financial position and can be reliably measured.
Events
Depreciation
Surplus
Ethical Dilemma
24. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Debit
Adjusting Entry
Ethical Dilemma
Acquisition
25. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Owner Investment
Business Entity Assumption
Long Term Investments
Revenues
26. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Accounting Equation
Generally Accepted Accounting Principles
Accrued Expenses
Financial Accounting Standards Board
27. Record containing all accounts (with amounts) for a business.
Cost Principle
NYSE (New York Stock Exchange)
Ledger
Accounting Equation
28. Business owned by two or more people.
Securities
Closing process
Partnership
Materiality Constraint
29. 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).
Secured Loan
Account
Closing Entries
Compound Journal Entries
30. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Internal users
Partnership Agreement
Annual Financial Statements
Events
31. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Conceptual Framework
Equity
SMART Goal
Debit
32. Exchanges of economic value between one entity and another entity.
External Transactions
Money Market Account
Unearned Revenues
Owner Investment
33. 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.
Account Balance
Unclassified Balance Sheets
Plant Assets
Ponzi Scheme
34. Income from investments - including dividends - interest - or the sale of a property.
Fiscal Year
Compound Journal Entries
Portfolio Income
Straight-line Depreciation Method
35. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Securities and Exchange Commission
Current Assets
Natural Business Years
Statement of Cash Flows
36. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Contra Account
Securities and Exchange Commission
Book Value
IPO
37. 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
Fixed Expense
NASDAQ
Profit Margin
Unsecured Loan
38. 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
Generally Accepted Accounting Principles
Sarbanes-Oxley Act (SOX)
Credit
Classified Balance Sheet
39. Income that is available after all of the essential financial commitments have been paid.
Discretionary Income
Cost Principle
Managerial Accounting
Trial balance
40. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Time Period Assumptions
Stock
Stockholders
Full Disclosure Principle
41. Uncertainty about expected return.
Account Balance
Risk
Revenue Recognition Principle
Owner - Capital
42. Journal entries that affect at least three accounts.
Profit Margin
Net Loss
Compound Journal Entries
Unearned Revenue
43. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
SEC (Securites and Exchange Commision)
Mergers
Current Ratio
Accrued Expenses
44. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Net Loss
Unadjusted Trial Balance
Time Period Assumptions
Bookkeeping
45. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Securities
Financial Accounting
Partnership
Ledger
46. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Work Sheet
Secured Loan
Return on Assets
Accrual Basis Accounting
47. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Stock
NYSE (New York Stock Exchange)
Book Value
Full Disclosure Principle
48. Statements that show the effect of proposed transactions and events as if they had occurred.
Profit Margin
Pro Forma Financial Statement
Recordkeeping
Ethics
49. Business owned by a single person.
Varaiable Expense
Compound Journal Entries
Sole Propietorship
Bonds
50. Assets put into the business by the owner.
Contra Account
Straight-line Depreciation Method
Owner Investment
Source Documents