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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 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.
Revenue Recognition Principle
Business Entity Assumption
Deficit
International Financial Reporting Standards
2. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Debtors
Ethical Dilemma
Unearned Revenues
Accounting Period
3. Items paid for in advance of receiving their benefits. Classified as assets.
Accounting Cycle
Prepaid Expenses
Statement of Cash Flows
Current Liabilities
4. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Depreciation
Limited Liability Corporation
Matching Principle (or Expense Recognition Principle)
Financial Accounting
5. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Fixed Expense
Balance Column Account
Journalizing
Monetary Unit Assumption
6. Owners of a corporation who usually receive dividends. Also called shareholders.
Monetary Unit Assumption
Stockholders
Source Documents
Sole Proprietorship
7. Business owned by one person that is not organized as a corporation.
Long Term Liabilities
Pro Forma Financial Statement
Federal Reserve System
Sole Proprietorship
8. The value of a future cash steam discounted at the appropriate market interest rate.
Posting
Portfolio Income
Present Value
Net Loss
9. The principle prescribing that revenue is recognized when earned.
Revenue Recognition Principle
Acquisition
Time Period Assumptions
Posting
10. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Income Summary
Return
Stock
Debit
11. Happenings that both affect an organization's financial position and can be reliably measured.
Stock
Securities and Exchange Commission
Events
Owner - Capital
12. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Net Loss
Debt Ratio
Bailout
Business Entity Assumption
13. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Generally Accepted Accounting Principles
Debt Ratio
Shareholders
Closing process
14. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Partnership Agreement
Materiality Constraint
International Financial Reporting Standards
Mergers
15. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
Debit
Shares
Ethical Dilemma
16. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Trial balance
Working Papers
Unsecured Loan
Risk
17. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Corporation
Cost Principle
Accrual Basis Accounting
Accounting Cycle
18. 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.
Expense Recognition Principle
Accounting Period
Matching Principle (or Expense Recognition Principle)
Balance Sheet
19. List of accounts used by a company' includes and identification number for each account.
Ledger
Operating Cycle
Current Assets
Chart of Accounts
20. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Partnership Agreement
Bookkeeping
Long Term Investments
Plant Assets
21. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Statement of Cash Flows
External Transactions
Time Period Assumptions
Temporary Accounts
22. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
International Accounting Standards Board
Equity
Current Assets
Sole Proprietorship
23. Owner's claim on the assets of a business; equals the residual interest in an entity's assets after deducting liabilities. Also called net assets.
Equity
Work Sheet
General Journal
Post Closing Trial Balance
24. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Temporary Accounts
Long Term Investments
Unearned Revenue
Securities
25. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Liabilities
Return
Statement of Owner's Equity
International Accounting Standards Board
26. 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
Monetary Unit Assumption
T Account
Events
Preferred Stock
27. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Journal
Expenses
Return
Income Summary
28. Owners of a corporation who usually receive dividends. Also called stockholders.
Shareholders
Partnership
Creditors
Unearned Revenues
29. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Unearned Revenue
Permanent Accounts
Partnership Agreement
Owner Investment
30. 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.
International Financial Reporting Standards
Account
Time Period Assumptions
Common Stock
31. Loaning or giving money to a business in orer to save it from bankruptcy.
Bailout
Adjusted Trial Balance
Ponzi Scheme
Statement of Owner's Equity
32. Process of recording transactions in a journal.
Owner Withdrawals
Cash Basis Accounting
Preferred Stock
Journalizing
33. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Accounting Cycle
Ponzi Scheme
Long Term Investments
Return on Assets
34. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Operating Cycle
Long Term Investments
Income Statement
Recordkeeping
35. Uncertainty about expected return.
Pro Forma Financial Statement
Risk
Passive Income
Source Documents
36. The combining of two or more comapnies into one larger company.
Natural Business Years
Mergers
Ponzi Scheme
Debit
37. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Current Liabilities
Internal users
Fiscal Year
Common Stock
38. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Present Value
Prepaid Expenses
Audit
Book Value
39. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Current Ratio
Accrual Basis Accounting
Classified Balance Sheet
Interim Financial Statements
40. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Sole Proprietorship
Ledger
Recordkeeping
Managerial Accounting
41. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Intangible assets
Mergers
Assets
Income Statement
42. Tool used to show the effects of transactions and events on individual accounts.
Annual Financial Statements
Journal
T Account
International Financial Reporting Standards
43. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Equity
Partnership
Debit
Long Term Investments
44. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Accounting
Book Value
Unclassified Balance Sheets
Account Balance
45. Difference between total debits and total credits (including the beginning balance) for an account.
Balance Sheet
Account Balance
Credit
Securities and Exchange Commission
46. 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.
Unclassified Balance Sheets
Ponzi Scheme
Bonds
Partnership Agreement
47. 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)
Debit
Corporations
Temporary Accounts
48. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Reversing Entries
Shares
Common Stock
Fixed Expense
49. Excess of expenses over revenues for a period.
Net Loss
Current Ratio
Current Liabilities
Interim Financial Statements
50. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Bailout
Adjusting Entry
Unsecured Loan
Bookkeeping