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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. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Passive Income
Matching Principle (or Expense Recognition Principle)
Audit
Adjusted Trial Balance
2. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Unclassified Balance Sheets
Securities
Measurement Principle
Interim Financial Statements
3. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Return on Assets
Current Liabilities
Temporary Accounts
Sarbanes-Oxley Act (SOX)
4. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Revenue Recognition Principle
Work Sheet
Annual Financial Statements
Corporations
5. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Working Papers
Measurement Principle
Partnership
Sarbanes-Oxley Act (SOX)
6. Optional entries recorded at the beginning of a period that prepare the accounts for the usual journal entries as if adjusting entries had not occurred in the prior period.
Current Liabilities
Unearned Revenues
Sarbanes-Oxley Act (SOX)
Reversing Entries
7. An expense that changes from period to perio - such as food or gasoline costs.
Pro Forma Financial Statement
Varaiable Expense
Source Documents
General Journal
8. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Sole Propietorship
Prepaid Expenses
Account
Accounting Cycle
9. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Debt Ratio
CD (Certificate of Deposit)
Time Period Assumptions
Statement of Cash Flows
10. Statements that show the effect of proposed transactions and events as if they had occurred.
Partnership
Generally Accepted Accounting Principles
Pro Forma Financial Statement
Accounting Cycle
11. 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.
Going-concern Assumptions
Interim Financial Statements
Preferred Stock
Matching Principle
12. Assets pulled out of the business by the owner.
Cost Principle
Accounting Cycle
Compound Journal Entries
Owner Withdrawals
13. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Contra Account
Sole Proprietorship
Creditors
Debt Ratio
14. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Money Market Account
Portfolio Income
Journal
Chart of Accounts
15. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
SEC (Securites and Exchange Commision)
Revenues
Income Statement
Partnership
16. Persons using accounting information who are not directly involved in running the organization.
Debtors
External Users
Double Entry Accounting
Partnership Agreement
17. 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).
Income Summary
Ledger
Double Entry Accounting
Expense Recognition Principle
18. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Debtors
Sarbanes-Oxley Act (SOX)
Temporary Accounts
Work Sheet
19. Length of time covered by financial statements; also called reporting period.
Accounting Period
Recordkeeping
Straight-line Depreciation Method
Shares
20. Individuals hired to review financial reports and information systems of organizations.
Auditors
Materiality Constraint
Expanded Accounting Equation
External Users
21. 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.
NYSE (New York Stock Exchange)
Debt Ratio
Measurement Principle
Unearned Revenue
22. Items paid for in advance of receiving their benefits. Classified as assets.
Going-concern Assumptions
Matching Principle
Prepaid Expenses
Present Value
23. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Return
Stock
Federal Reserve System
Conceptual Framework
24. A legal entity that is seperate from its owners.
Cost-benefit Constraint
Risk
Corporations
Contra Account
25. The first time a company sells shares of its stock to the public.
IPO
Debt Ratio
Owner Investment
Natural Business Years
26. 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
Account Balance
Owner - Capital
NASDAQ
Expenses
27. Difference between total debits and total credits (including the beginning balance) for an account.
Risk Tolerance
Account Balance
T Account
Expense Recognition Principle
28. List of accounts used by a company' includes and identification number for each account.
Owner - Capital
Chart of Accounts
Generally Accepted Accounting Principles
IPO
29. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Internal users
Recordkeeping
Partnership
Accounting
30. Business owned by one person that is not organized as a corporation.
Risk Tolerance
Creditors
Sole Proprietorship
Bailout
31. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Matching Principle (or Expense Recognition Principle)
Long Term Liabilities
Surplus
Net Income
32. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Double Entry Accounting
Permanent Accounts
Adjusted Trial Balance
Fiscal Year
33. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Cost Principle
Source Documents
Current Assets
Owner Investment
34. Business owned by two or more people.
Assets
External Transactions
Partnership
Work Sheet
35. 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.
Closing Entries
Accounting Period
Income Statement
Internal transactions
36. 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.
Current Ratio
Debtors
Time Period Assumptions
Ponzi Scheme
37. Goals that are specific - measurable - attainable - realistic - and time bound.
SMART Goal
Securities and Exchange Commission
Compound Journal Entries
Contra Account
38. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Intangible assets
Business Entity Assumption
Pro Forma Financial Statement
Revenue Recognition Principle
39. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Conceptual Framework
Balance Sheet
Double Entry Accounting
Working Papers
40. Activities within an organization that can affect the accounting equation.
Limited Liability Corporation
Internal transactions
Journalizing
Stock
41. Revenues earned in a period that both unrecorded and not yet received in cash (or other assets; adjusting entries for recording accrued revenues involve increasing assets and increasing revenues.
Accrued Expenses
Accrued Revenues
Limited Liability Corporation
Monetary Unit Assumption
42. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Credit
Full Disclosure Principle
Expense Recognition Principle
Matching Principle (or Expense Recognition Principle)
43. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Partnership
Owner Investment
Adjusted Trial Balance
Debit
44. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Classified Balance Sheet
Return on Assets
Bonds
Cost-benefit Constraint
45. 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
Income Summary
Book Value
Sarbanes-Oxley Act (SOX)
T Account
46. Gross increase in equity from a company's business activities that earn income.
Revenues
Adjusting Entry
Accrual Basis Accounting
Full Disclosure Principle
47. Loaning or giving money to a business in orer to save it from bankruptcy.
Bailout
Permanent Accounts
Sole Proprietorship
Accrued Revenues
48. Exchanges of economic value between one entity and another entity.
Net Loss
External Transactions
Corporation
Limited Liability Corporation
49. Independent group of full-time members responsible for setting accounting rules.
Balance Column Account
Financial Accounting Standards Board
Account Balance
Operating Cycle
50. 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.
Work Sheet
Current Assets
Credit
International Financial Reporting Standards