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Test your basic knowledge |
DSST Principles Of Finance
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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. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Income Summary
Secured Loan
Contra Account
Compound Journal Entries
2. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Recordkeeping
SEC (Securites and Exchange Commision)
Ponzi Scheme
Matching Principle (or Expense Recognition Principle)
3. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Sole Proprietorship
Partnership Agreement
Double Entry Accounting
Internal transactions
4. The NYSE was founded in 1792 and is the oldest and larvest securities market in the United States. it is located on Wall Street in New York.
Closing process
Expense Recognition Principle
NYSE (New York Stock Exchange)
Assets
5. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Federal Reserve System
Current Liabilities
Auditors
Book Value
6. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Partnership
Going-concern Assumptions
Straight-line Depreciation Method
Depreciation
7. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Recordkeeping
Accounting
External Users
Common Stock
8. Difference between total debits and total credits (including the beginning balance) for an account.
Account Balance
Trial balance
Stock
Liabilities
9. The money left over when income exceeds expenditure.
Expanded Accounting Equation
IPO
Temporary Accounts
Surplus
10. 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
Balance Sheet
Straight-line Depreciation Method
Risk Tolerance
11. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Account Balance
Contra Account
Partnership Agreement
Posting Reference Column
12. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Accounting Equation
Accrued Expenses
Unsecured Loan
Partnership
13. Assets put into the business by the owner.
Interim Financial Statements
Owner Investment
Acquisition
Internal users
14. Process of recording transactions in a journal.
Equity
Materiality Constraint
Journalizing
Account Balance
15. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
Adjusting Entry
Straight-line Depreciation Method
Plant Assets
16. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Statement of Owner's Equity
Deficit
Book Value
Adjusted Trial Balance
17. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Interim Financial Statements
Permanent Accounts
Expense Recognition Principle
Expenses
18. An expense that changes from period to perio - such as food or gasoline costs.
Bookkeeping
Fiscal Year
Varaiable Expense
Measurement Principle
19. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Common Stock
Journalizing
Work Sheet
Interim Financial Statements
20. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Ethics
Assets
Events
Equity
21. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
International Accounting Standards Board
Equity
Accrued Expenses
Net Loss
22. Individuals or organizations entitled to receive payments
Creditors
Assets
Contra Account
Account
23. 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.
External Transactions
Stockholders
Owner - Capital
CD (Certificate of Deposit)
24. Activities within an organization that can affect the accounting equation.
Internal transactions
Financial Accounting
Mergers
Return
25. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Financial Accounting Standards Board
Return
Book Value
Statement of Cash Flows
26. Owners of a corporation who usually receive dividends. Also called shareholders.
International Accounting Standards Board
Net Income
Stockholders
Limited Liability Corporation
27. List of accounts used by a company' includes and identification number for each account.
Chart of Accounts
Income Statement
Securities and Exchange Commission
Expense Recognition Principle
28. All purpose journal for recording the debits and credits of transactions and events.
Shares
Federal Reserve System
Stockholders
General Journal
29. Accounting information is based on cost with potential subsequent adjustments to fair value.
Bonds
Unearned Revenues
Adjusted Trial Balance
Measurement Principle
30. Excess of expenses over revenues for a period.
Revenue Recognition Principle
Classified Balance Sheet
Net Loss
Income Summary
31. Report of changes in equity over a period; adjusted for increases and for decreases.
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32. Individuals or organizations that owe money.
Assets
Debtors
Ledger
Unsecured Loan
33. 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).
Creditors
Income Summary
Ledger
Intangible assets
34. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Journalizing
Credit
Reversing Entries
Fiscal Year
35. Record containing all accounts (with amounts) for a business.
Ledger
Chart of Accounts
Partnership
Annual Financial Statements
36. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Chart of Accounts
Income Statement
T Account
CD (Certificate of Deposit)
37. The twelve month period that ends when a company's sales activities are at their lowest point.
Natural Business Years
Sole Propietorship
Permanent Accounts
Credit
38. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Chart of Accounts
Plant Assets
Surplus
Profit Margin
39. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Pro Forma Financial Statement
Account Balance
Straight-line Depreciation Method
Income Statement
40. Rules that specify acceptable accounting practices.
Post Closing Trial Balance
Generally Accepted Accounting Principles
Natural Business Years
Expenses
41. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Return on Assets
Full Disclosure Principle
Discretionary Income
Return
42. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Internal transactions
Mergers
Unearned Revenue
Full Disclosure Principle
43. Persons using accounting information who are directly involved in managing the organization.
Internal users
Revenues
Unsecured Loan
Statement of Owner's Equity
44. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Fiscal Year
Owner Investment
Sole Proprietorship
Temporary Accounts
45. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Corporation
Debtors
Interim Financial Statements
Passive Income
46. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Time Period Assumptions
Corporation
Temporary Accounts
Current Assets
47. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Accounting Equation
International Accounting Standards Board
Owner - Capital
General Journal
48. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
NASDAQ
Income Summary
Ethics
Income Statement
49. 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
Credit
Stock
Ethical Dilemma
50. 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).
Statement of Owner's Equity
Closing Entries
Expenses
Long Term Investments