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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. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Ethics
Statement of Cash Flows
Accrual Basis Accounting
Fiscal Year
2. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Credit
Mergers
Journalizing
Cost Principle
3. A loan that is backed by collateral such as cars - houses - or other assets.
International Financial Reporting Standards
Secured Loan
Journalizing
General Journal
4. 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
Income Summary
Matching Principle
Book Value
Preferred Stock
5. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Post Closing Trial Balance
Unsecured Loan
Depreciation
Balance Column Account
6. Owners of a corporation who usually receive dividends. Also called stockholders.
Events
IPO
Shareholders
Journalizing
7. Individuals hired to review financial reports and information systems of organizations.
SMART Goal
Auditors
Cost-benefit Constraint
Debit
8. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Return on Assets
Generally Accepted Accounting Principles
Going-concern Assumptions
Chart of Accounts
9. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Book Value
Closing process
Return on Assets
Equity
10. Rules that specify acceptable accounting practices.
Net Income
Posting
Fixed Expense
Generally Accepted Accounting Principles
11. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Accounting
Going-concern Assumptions
Stockholders
Accrual Basis Accounting
12. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Cash Basis Accounting
Bailout
Matching Principle
Current Ratio
13. An expense that changes from period to perio - such as food or gasoline costs.
Source Documents
Bookkeeping
Varaiable Expense
Audit
14. Tool used to show the effects of transactions and events on individual accounts.
Managerial Accounting
Going-concern Assumptions
T Account
Journal
15. 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
NASDAQ
CD (Certificate of Deposit)
Classified Balance Sheet
Money Market Account
16. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Net Income
Net Loss
Acquisition
Owner - Capital
17. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Auditors
Business Entity Assumption
Conceptual Framework
Ethical Dilemma
18. 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).
Closing Entries
Classified Balance Sheet
Auditors
Working Papers
19. A tax deferred account that allows individuals to plan for their retirement.
Source Documents
Sole Propietorship
IRA (Individual Retirement Account)
Bonds
20. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Discretionary Income
Accounting Equation
Unclassified Balance Sheets
Account
21. Report of changes in equity over a period; adjusted for increases and for decreases.
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22. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Depreciation
Interim Financial Statements
Accounting Period
NASDAQ
23. Assets pulled out of the business by the owner.
International Accounting Standards Board
Owner Withdrawals
Prepaid Expenses
Shares
24. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Plant Assets
Accounting Equation
Unearned Revenues
Accounting Period
25. 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.
Unearned Revenue
Current Assets
Auditors
Ponzi Scheme
26. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Prepaid Expenses
Current Liabilities
Unadjusted Trial Balance
Account
27. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Temporary Accounts
Going-concern Assumptions
Managerial Accounting
Double Entry Accounting
28. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Trial balance
Sole Proprietorship
Events
Income Summary
29. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Profit Margin
Long Term Investments
Expenses
Events
30. 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.
Debt Ratio
Credit
Income Statement
Mergers
31. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Partnership Agreement
Annual Financial Statements
Journal
Compound Journal Entries
32. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Corporation
Prepaid Expenses
Securities
Chart of Accounts
33. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Risk Tolerance
Annual Financial Statements
Time Period Assumptions
Return on Assets
34. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Time Period Assumptions
Journal
Surplus
Journalizing
35. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Recordkeeping
Annual Financial Statements
Stock
Ponzi Scheme
36. Income that is available after all of the essential financial commitments have been paid.
Discretionary Income
External Transactions
Sarbanes-Oxley Act (SOX)
Debt Ratio
37. Business owned by one person that is not organized as a corporation.
Expenses
Sole Proprietorship
Common Stock
Financial Accounting
38. Expenses that remain the same regardless of the circumstances.
Chart of Accounts
Net Loss
Fixed Expense
Account Balance
39. 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.
Debt Ratio
Unearned Revenue
Federal Reserve System
Revenues
40. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
Double Entry Accounting
Posting Reference Column
Portfolio Income
41. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Shares
Managerial Accounting
Audit
Closing Entries
42. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accounting
Events
Interim Financial Statements
Audit
43. 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.
Statement of Cash Flows
Debt Ratio
Unsecured Loan
International Financial Reporting Standards
44. The first time a company sells shares of its stock to the public.
Intangible assets
Going-concern Assumptions
Unclassified Balance Sheets
IPO
45. 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.
Fixed Expense
Recordkeeping
Depreciation
Liabilities
46. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Source Documents
Closing process
Balance Sheet
Revenue Recognition Principle
47. Income from investments - including dividends - interest - or the sale of a property.
Unclassified Balance Sheets
Journalizing
Portfolio Income
Unsecured Loan
48. 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
Profit Margin
Balance Column Account
Debt Ratio
49. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
NASDAQ
Measurement Principle
Expanded Accounting Equation
Work Sheet
50. 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
Creditors
Unsecured Loan
Surplus