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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. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Balance Column Account
General Journal
Debit
Accrued Expenses
2. Assets pulled out of the business by the owner.
Owner Withdrawals
Net Income
Working Papers
Time Period Assumptions
3. Process of recording transactions in a journal.
Journalizing
Corporation
Intangible assets
Shareholders
4. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Partnership Agreement
Classified Balance Sheet
Statement of Cash Flows
Interim Financial Statements
5. Activities within an organization that can affect the accounting equation.
Current Ratio
Time Period Assumptions
Internal transactions
Statement of Owner's Equity
6. Report of changes in equity over a period; adjusted for increases and for decreases.
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7. Happenings that both affect an organization's financial position and can be reliably measured.
Events
Reversing Entries
Source Documents
Contra Account
8. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Ethics
Securities
Full Disclosure Principle
IPO
9. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
External Users
Natural Business Years
Conceptual Framework
Time Period Assumptions
10. Accounting information is based on cost with potential subsequent adjustments to fair value.
Unadjusted Trial Balance
Net Income
Acquisition
Measurement Principle
11. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Annual Financial Statements
Ponzi Scheme
Cost Principle
SMART Goal
12. The first time a company sells shares of its stock to the public.
Matching Principle
Going-concern Assumptions
IPO
Double Entry Accounting
13. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Profit Margin
Shares
Deficit
Recordkeeping
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.
Straight-line Depreciation Method
Working Papers
Accounting Period
Financial Accounting Standards Board
15. Individuals hired to review financial reports and information systems of organizations.
Common Stock
Corporation
Auditors
Corporations
16. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Corporations
Partnership
Unadjusted Trial Balance
CD (Certificate of Deposit)
17. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Sarbanes-Oxley Act (SOX)
Owner Withdrawals
Expenses
Cost Principle
18. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Partnership Agreement
Events
Bailout
Operating Cycle
19. 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
Unearned Revenues
Current Assets
Bonds
20. Monies (or sums of money) received from an investment; often in percent form.
Return
Current Liabilities
Common Stock
Bailout
21. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
IRA (Individual Retirement Account)
Long Term Investments
Stock
Accrued Expenses
22. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Cash Basis Accounting
Credit
Income Summary
Current Assets
23. 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
Revenue Recognition Principle
Financial Accounting Standards Board
NASDAQ
Sarbanes-Oxley Act (SOX)
24. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Long Term Investments
Balance Column Account
Common Stock
Bonds
25. Owners of a corporation who usually receive dividends. Also called stockholders.
Shareholders
Expanded Accounting Equation
Account Balance
Assets
26. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Closing Entries
Partnership Agreement
Journal
Partnership
27. Assets put into the business by the owner.
Depreciation
Current Liabilities
Owner Investment
Partnership Agreement
28. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Partnership
Monetary Unit Assumption
Limited Liability Corporation
Stock
29. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Materiality Constraint
Money Market Account
Conceptual Framework
Business Entity Assumption
30. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Cash Basis Accounting
Measurement Principle
Current Ratio
Trial balance
31. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Permanent Accounts
Recordkeeping
Creditors
Equity
32. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Securities
Accounting Equation
Passive Income
Fiscal Year
33. Persons using accounting information who are directly involved in managing the organization.
Posting
Compound Journal Entries
Bonds
Internal users
34. Independent group of full-time members responsible for setting accounting rules.
Net Loss
Financial Accounting Standards Board
Events
Posting
35. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Current Liabilities
Deficit
Unadjusted Trial Balance
Time Period Assumptions
36. 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.
Post Closing Trial Balance
Expense Recognition Principle
Plant Assets
Monetary Unit Assumption
37. 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
Bailout
Unadjusted Trial Balance
Temporary Accounts
38. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenues
Events
Creditors
Intangible assets
39. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
SEC (Securites and Exchange Commision)
Liabilities
Business Entity Assumption
Journal
40. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Net Loss
CD (Certificate of Deposit)
Equity
Long Term Investments
41. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Owner Withdrawals
Limited Liability Corporation
Journalizing
Matching Principle
42. Gross increase in equity from a company's business activities that earn income.
Events
Present Value
Time Period Assumptions
Revenues
43. Journal entry at the end of an accounting period to bring an asset or liability account to its proper amount and update the related expenses or revenue account.
Revenues
Conceptual Framework
SEC (Securites and Exchange Commision)
Adjusting Entry
44. Excess of expenses over revenues for a period.
Posting
Stockholders
Adjusted Trial Balance
Net Loss
45. Persons using accounting information who are not directly involved in running the organization.
Compound Journal Entries
Partnership
External Users
Reversing Entries
46. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
International Financial Reporting Standards
Work Sheet
Securities
Closing Entries
47. 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
Post Closing Trial Balance
Preferred Stock
Ethical Dilemma
Long Term Liabilities
48. A legal entity that is seperate from its owners.
Corporations
Discretionary Income
Reversing Entries
Varaiable Expense
49. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Statement of Owner's Equity
Bailout
Statement of Cash Flows
Posting
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).
Matching Principle
Closing Entries
Matching Principle (or Expense Recognition Principle)
Long Term Liabilities