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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. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Long Term Liabilities
SMART Goal
Current Liabilities
Intangible assets
2. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Portfolio Income
Adjusted Trial Balance
Matching Principle (or Expense Recognition Principle)
Federal Reserve System
3. Independent group of full-time members responsible for setting accounting rules.
Corporation
Net Loss
Financial Accounting Standards Board
Reversing Entries
4. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Secured Loan
Unsecured Loan
Interim Financial Statements
Business Entity Assumption
5. Items paid for in advance of receiving their benefits. Classified as assets.
Matching Principle
Matching Principle (or Expense Recognition Principle)
Revenues
Prepaid Expenses
6. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Pro Forma Financial Statement
Posting
Unclassified Balance Sheets
Accounting Equation
7. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Audit
Debt Ratio
Auditors
Classified Balance Sheet
8. All purpose journal for recording the debits and credits of transactions and events.
General Journal
Net Loss
Revenues
Generally Accepted Accounting Principles
9. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Contra Account
Creditors
Bookkeeping
Unsecured Loan
10. Happenings that both affect an organization's financial position and can be reliably measured.
International Accounting Standards Board
Source Documents
Federal Reserve System
Events
11. Goals that are specific - measurable - attainable - realistic - and time bound.
SMART Goal
Shares
Financial Accounting Standards Board
Events
12. Business owned by two or more people.
Partnership
Book Value
Return on Assets
Adjusting Entry
13. 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
Adjusting Entry
Stockholders
Journal
14. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Time Period Assumptions
Posting
Limited Liability Corporation
Compound Journal Entries
15. 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.
Balance Column Account
Matching Principle
Recordkeeping
Owner - Capital
16. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Book Value
Sarbanes-Oxley Act (SOX)
Net Income
Return on Assets
17. The value of a future cash steam discounted at the appropriate market interest rate.
Conceptual Framework
Trial balance
Securities
Present Value
18. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Balance Sheet
Passive Income
Permanent Accounts
Partnership Agreement
19. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Current Assets
Acquisition
Accrued Expenses
Securities
20. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Journal
External Transactions
SEC (Securites and Exchange Commision)
Plant Assets
21. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Financial Accounting Standards Board
Long Term Investments
Annual Financial Statements
Bailout
22. 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.
Debt Ratio
Accrued Revenues
Current Ratio
Net Income
23. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Temporary Accounts
Financial Accounting
Mergers
Time Period Assumptions
24. Persons using accounting information who are directly involved in managing the organization.
Matching Principle (or Expense Recognition Principle)
Posting
Money Market Account
Internal users
25. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Expanded Accounting Equation
Partnership Agreement
Corporations
Fiscal Year
26. Rules that specify acceptable accounting practices.
Trial balance
Annual Financial Statements
Adjusted Trial Balance
Generally Accepted Accounting Principles
27. Tool used to show the effects of transactions and events on individual accounts.
T Account
Return
Fiscal Year
Ethical Dilemma
28. The principle prescribing that revenue is recognized when earned.
Accounting Cycle
Revenue Recognition Principle
Liabilities
Managerial Accounting
29. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Profit Margin
Materiality Constraint
Federal Reserve System
Statement of Owner's Equity
30. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership
Accrual Basis Accounting
Annual Financial Statements
Stock
31. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Risk Tolerance
Materiality Constraint
Unsecured Loan
Net Loss
32. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Cost-benefit Constraint
Acquisition
Balance Column Account
Auditors
33. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Unsecured Loan
Assets
Plant Assets
Straight-line Depreciation Method
34. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Compound Journal Entries
SEC (Securites and Exchange Commision)
Assets
Account
35. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Book Value
Long Term Liabilities
Net Income
Double Entry Accounting
36. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenues
Events
Natural Business Years
Conceptual Framework
37. Assets pulled out of the business by the owner.
Owner Withdrawals
Credit
Work Sheet
Natural Business Years
38. Individuals or organizations that owe money.
Journal
Depreciation
Debtors
Credit
39. Income from investments - including dividends - interest - or the sale of a property.
Monetary Unit Assumption
Unclassified Balance Sheets
Portfolio Income
Reversing Entries
40. 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.
NYSE (New York Stock Exchange)
Post Closing Trial Balance
Ponzi Scheme
Account
41. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Long Term Liabilities
IRA (Individual Retirement Account)
Accounting Cycle
Book Value
42. Uncertainty about expected return.
Debit
Common Stock
Sarbanes-Oxley Act (SOX)
Risk
43. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Bookkeeping
Accounting Period
Straight-line Depreciation Method
Varaiable Expense
44. 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
Measurement Principle
Sole Propietorship
Matching Principle
45. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Closing Entries
Profit Margin
Work Sheet
Recordkeeping
46. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
External Transactions
Unclassified Balance Sheets
Time Period Assumptions
T Account
47. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Ledger
Matching Principle
Acquisition
Time Period Assumptions
48. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Net Income
Federal Reserve System
Accrued Expenses
Bonds
49. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Fiscal Year
Accounting Equation
Partnership
Book Value
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.
International Financial Reporting Standards
Statement of Cash Flows
Internal transactions
Monetary Unit Assumption