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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. Journal entries that affect at least three accounts.
Audit
Limited Liability Corporation
Compound Journal Entries
Balance Column Account
2. 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
Preferred Stock
Sarbanes-Oxley Act (SOX)
Income Summary
Debt Ratio
3. 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.
Adjusting Entry
Equity
Double Entry Accounting
Reversing Entries
4. The value of a future cash steam discounted at the appropriate market interest rate.
Owner Withdrawals
Accrual Basis Accounting
Equity
Present Value
5. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Common Stock
Compound Journal Entries
Source Documents
Net Income
6. 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.
Account Balance
International Financial Reporting Standards
Ethics
Cost Principle
7. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Unsecured Loan
Reversing Entries
Closing Entries
Bookkeeping
8. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Equity
Expenses
Materiality Constraint
Money Market Account
9. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Creditors
Current Liabilities
Closing process
Ethics
10. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Working Papers
Deficit
Bookkeeping
Current Liabilities
11. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Bookkeeping
Events
Depreciation
Prepaid Expenses
12. Accounting information is based on cost with potential subsequent adjustments to fair value.
Measurement Principle
International Accounting Standards Board
Sarbanes-Oxley Act (SOX)
Bailout
13. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Working Papers
Cash Basis Accounting
Posting Reference Column
Stock
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.
Permanent Accounts
Risk Tolerance
Acquisition
Straight-line Depreciation Method
15. Assets put into the business by the owner.
Present Value
Partnership
Shares
Owner Investment
16. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenues
Audit
Accrued Expenses
Generally Accepted Accounting Principles
17. 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
Sarbanes-Oxley Act (SOX)
Unearned Revenue
Present Value
NASDAQ
18. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Accounting
Accounting Period
Credit
Owner Investment
19. Monies (or sums of money) received from an investment; often in percent form.
Temporary Accounts
Unearned Revenues
Owner Investment
Return
20. Length of time covered by financial statements; also called reporting period.
Depreciation
International Financial Reporting Standards
Assets
Accounting Period
21. Report of changes in equity over a period; adjusted for increases and for decreases.
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22. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
Journal
Unearned Revenues
Journalizing
23. Record containing all accounts (with amounts) for a business.
Equity
Compound Journal Entries
Operating Cycle
Ledger
24. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Current Ratio
Audit
Secured Loan
Post Closing Trial Balance
25. A corporation's basic ownership share.
Double Entry Accounting
Common Stock
Unclassified Balance Sheets
Shares
26. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Return on Assets
Compound Journal Entries
NASDAQ
Corporations
27. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Matching Principle
Accrued Revenues
Statement of Cash Flows
CD (Certificate of Deposit)
28. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Varaiable Expense
Partnership
Bailout
Cash Basis Accounting
29. All purpose journal for recording the debits and credits of transactions and events.
Account Balance
IPO
General Journal
Stockholders
30. Statements that show the effect of proposed transactions and events as if they had occurred.
Matching Principle (or Expense Recognition Principle)
Events
Pro Forma Financial Statement
Common Stock
31. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Work Sheet
Audit
Acquisition
Debt Ratio
32. Persons using accounting information who are not directly involved in running the organization.
Net Loss
External Users
Trial balance
International Financial Reporting Standards
33. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Securities
Source Documents
Shares
Book Value
34. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Balance Column Account
Ethics
Cost Principle
Expanded Accounting Equation
35. A legal entity that is seperate from its owners.
NYSE (New York Stock Exchange)
Income Summary
Corporations
Chart of Accounts
36. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Credit
T Account
Risk
Permanent Accounts
37. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Interim Financial Statements
Current Assets
Post Closing Trial Balance
Long Term Liabilities
38. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Measurement Principle
International Accounting Standards Board
Stock
Accounting Period
39. Difference between total debits and total credits (including the beginning balance) for an account.
Source Documents
Account Balance
Unclassified Balance Sheets
Closing Entries
40. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Time Period Assumptions
Ledger
Net Income
Passive Income
41. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Working Papers
Balance Sheet
Matching Principle
Long Term Liabilities
42. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Corporation
Closing Entries
Interim Financial Statements
Post Closing Trial Balance
43. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
IPO
Pro Forma Financial Statement
Auditors
44. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Secured Loan
Credit
Debit
Revenues
45. Rules that specify acceptable accounting practices.
Unearned Revenue
Generally Accepted Accounting Principles
SMART Goal
Partnership
46. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Return
Accrued Revenues
Time Period Assumptions
Closing Entries
47. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Operating Cycle
Classified Balance Sheet
Accrued Revenues
Accounting Period
48. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Time Period Assumptions
Sarbanes-Oxley Act (SOX)
Cost Principle
Stock
49. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Depreciation
Income Statement
International Financial Reporting Standards
50. 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.
Common Stock
Expense Recognition Principle
SMART Goal
Business Entity Assumption