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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. 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
Sarbanes-Oxley Act (SOX)
Permanent Accounts
IRA (Individual Retirement Account)
Securities and Exchange Commission
2. Owners of a corporation who usually receive dividends. Also called shareholders.
Net Loss
Adjusted Trial Balance
Operating Cycle
Stockholders
3. The money left over when income exceeds expenditure.
Ethics
Surplus
General Journal
Revenues
4. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Securities and Exchange Commission
Net Loss
Accounting
Matching Principle (or Expense Recognition Principle)
5. Creditors' claims on an organization's assets; involves a probable future payment of assets - products - or services that a company is obligated to make due to past transactions or events.
Liabilities
Common Stock
Accounting
Revenue Recognition Principle
6. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Debit
Profit Margin
Return on Assets
Natural Business Years
7. Items paid for in advance of receiving their benefits. Classified as assets.
Corporations
Prepaid Expenses
Common Stock
Income Summary
8. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Sole Proprietorship
Straight-line Depreciation Method
Post Closing Trial Balance
IPO
9. Persons using accounting information who are not directly involved in running the organization.
SEC (Securites and Exchange Commision)
Sarbanes-Oxley Act (SOX)
Present Value
External Users
10. Area of accounting aimed mainly at serving external users.
Expanded Accounting Equation
Financial Accounting
Shareholders
Adjusted Trial Balance
11. Business owned by a single person.
Debt Ratio
Monetary Unit Assumption
Income Summary
Sole Propietorship
12. 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
Acquisition
Unearned Revenues
Mergers
13. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
T Account
Interim Financial Statements
Corporation
Common Stock
14. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Generally Accepted Accounting Principles
Adjusted Trial Balance
Return on Assets
Matching Principle (or Expense Recognition Principle)
15. Assets = Liabilities + Equity; Equity equals [Owner capital - owner withdrawal + revenue - expenses] for a non-corporation; Equity equals [Contributed capital - retained earnings + revenue - expenses] for a corporation where dividends are subtracted
Expanded Accounting Equation
Risk
Fiscal Year
Bookkeeping
16. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Account Balance
Debt Ratio
Net Income
Accrual Basis Accounting
17. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Book Value
Accounting Cycle
Discretionary Income
Income Summary
18. Expenses that remain the same regardless of the circumstances.
Fixed Expense
Time Period Assumptions
NYSE (New York Stock Exchange)
Cost-benefit Constraint
19. Independent group of full-time members responsible for setting accounting rules.
Financial Accounting Standards Board
Partnership
Long Term Investments
Risk Tolerance
20. Owners of a corporation who usually receive dividends. Also called stockholders.
Corporations
Shareholders
Creditors
Auditors
21. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Risk Tolerance
Closing Entries
Acquisition
Liabilities
22. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Fiscal Year
Cost-benefit Constraint
Posting
CD (Certificate of Deposit)
23. Business owned by two or more people.
Partnership
Accrued Revenues
Time Period Assumptions
Income Statement
24. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Posting
Time Period Assumptions
Current Ratio
Matching Principle (or Expense Recognition Principle)
25. 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
NYSE (New York Stock Exchange)
Preferred Stock
Present Value
Accounting Equation
26. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Posting Reference Column
Deficit
Working Papers
Common Stock
27. Principle that assumes transactions and events can be expressed in money units.
Trial balance
Monetary Unit Assumption
Return on Assets
Chart of Accounts
28. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Closing process
Accounting Equation
Debt Ratio
Creditors
29. Difference between total debits and total credits (including the beginning balance) for an account.
Partnership
Sarbanes-Oxley Act (SOX)
Account Balance
Working Papers
30. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Partnership
Debtors
Materiality Constraint
Secured Loan
31. All purpose journal for recording the debits and credits of transactions and events.
Unclassified Balance Sheets
Events
Stock
General Journal
32. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
SEC (Securites and Exchange Commision)
Trial balance
Internal transactions
Mergers
33. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Income Summary
Net Loss
Assets
Sole Proprietorship
34. Assets pulled out of the business by the owner.
Accounting
Time Period Assumptions
Owner Withdrawals
Balance Column Account
35. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Balance Sheet
Sole Proprietorship
Net Income
Return on Assets
36. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Compound Journal Entries
Conceptual Framework
Business Entity Assumption
Balance Sheet
37. Income that is available after all of the essential financial commitments have been paid.
Common Stock
Cost Principle
Discretionary Income
External Users
38. Excess of expenses over revenues for a period.
Plant Assets
Net Loss
Straight-line Depreciation Method
Stock
39. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Accrued Expenses
Contra Account
Surplus
Book Value
40. Statements that show the effect of proposed transactions and events as if they had occurred.
Pro Forma Financial Statement
Debtors
Audit
Closing process
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.
Balance Sheet
Accrued Revenues
Money Market Account
Chart of Accounts
42. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Passive Income
Internal users
Ethics
International Accounting Standards Board
43. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Return on Assets
Monetary Unit Assumption
Statement of Cash Flows
Matching Principle
44. Individuals hired to review financial reports and information systems of organizations.
Auditors
Net Loss
Partnership
Income Statement
45. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Accounting Period
Matching Principle (or Expense Recognition Principle)
Corporation
Contra Account
46. A corporation's basic ownership share.
Statement of Owner's Equity
Recordkeeping
Intangible assets
Common Stock
47. Account showing the owner's claim on company assets; equals owner investments plus net income (or less net loss) minus owner withdrawals since the company's inception. Also called Equity.
Time Period Assumptions
Unearned Revenues
Owner - Capital
Portfolio Income
48. The twelve month period that ends when a company's sales activities are at their lowest point.
Net Loss
Natural Business Years
Monetary Unit Assumption
Expanded Accounting Equation
49. Report of changes in equity over a period; adjusted for increases and for decreases.
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50. 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
International Financial Reporting Standards
Current Liabilities
Matching Principle (or Expense Recognition Principle)