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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. 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.
Return
Accrued Revenues
Income Statement
Adjusting Entry
2. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Passive Income
Assets
Compound Journal Entries
T Account
3. Individuals or organizations entitled to receive payments
Interim Financial Statements
Creditors
Cash Basis Accounting
Assets
4. Difference between total debits and total credits (including the beginning balance) for an account.
Stock
Journal
Surplus
Account Balance
5. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Matching Principle
Audit
Expenses
Time Period Assumptions
6. Business owned by a single person.
Fiscal Year
Source Documents
Revenue Recognition Principle
Sole Propietorship
7. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Corporation
Sole Propietorship
Generally Accepted Accounting Principles
8. Business owned by two or more people.
Sole Propietorship
Federal Reserve System
Partnership
Discretionary Income
9. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting Reference Column
Accounting Equation
Source Documents
Reversing Entries
10. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Business Entity Assumption
Debit
Bailout
Closing Entries
11. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
External Users
Classified Balance Sheet
Full Disclosure Principle
Unsecured Loan
12. Items paid for in advance of receiving their benefits. Classified as assets.
Corporation
Working Papers
NASDAQ
Prepaid Expenses
13. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Sole Proprietorship
Recordkeeping
Federal Reserve System
Long Term Liabilities
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.
Money Market Account
Net Loss
Straight-line Depreciation Method
Risk
15. Persons using accounting information who are not directly involved in running the organization.
Partnership
Time Period Assumptions
Owner Investment
External Users
16. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Permanent Accounts
Internal transactions
Interim Financial Statements
Current Assets
17. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Book Value
Work Sheet
Ethical Dilemma
Generally Accepted Accounting Principles
18. 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).
Journal
Income Summary
Securities
Double Entry Accounting
19. Income that is available after all of the essential financial commitments have been paid.
Unclassified Balance Sheets
Discretionary Income
Internal transactions
Closing process
20. 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
Unadjusted Trial Balance
Straight-line Depreciation Method
Posting Reference Column
21. 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.
Unadjusted Trial Balance
Owner Withdrawals
Liabilities
Adjusted Trial Balance
22. 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.
Measurement Principle
Accrued Expenses
Income Statement
Risk
23. Journal entries that affect at least three accounts.
Classified Balance Sheet
Compound Journal Entries
Return
Return on Assets
24. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Work Sheet
Annual Financial Statements
T Account
Varaiable Expense
25. The central bank of the United States - with 12 Federal Reserve branch banks located in major cities throughout the nation. It helps to regulate the US monetary and banking system.
Federal Reserve System
Chart of Accounts
Balance Column Account
Expense Recognition Principle
26. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Debt Ratio
Unclassified Balance Sheets
Current Liabilities
SEC (Securites and Exchange Commision)
27. Assets put into the business by the owner.
Owner Investment
Work Sheet
Unadjusted Trial Balance
Ethics
28. Outflows or using up of assets as part of operations of business to generate sales.
Recordkeeping
Fiscal Year
Expenses
Debit
29. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Matching Principle
Debtors
CD (Certificate of Deposit)
Unclassified Balance Sheets
30. Persons using accounting information who are directly involved in managing the organization.
Operating Cycle
Statement of Owner's Equity
Internal users
Risk Tolerance
31. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Managerial Accounting
Chart of Accounts
Temporary Accounts
NYSE (New York Stock Exchange)
32. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Common Stock
Managerial Accounting
Return on Assets
Source Documents
33. A tax deferred account that allows individuals to plan for their retirement.
General Journal
IRA (Individual Retirement Account)
Cost-benefit Constraint
Federal Reserve System
34. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Accrued Revenues
Partnership
Fiscal Year
CD (Certificate of Deposit)
35. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Balance Sheet
Assets
Conceptual Framework
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.
Matching Principle (or Expense Recognition Principle)
Permanent Accounts
Expenses
Accrued Revenues
37. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Risk Tolerance
Varaiable Expense
Matching Principle (or Expense Recognition Principle)
Recordkeeping
38. The twelve month period that ends when a company's sales activities are at their lowest point.
Book Value
Natural Business Years
Owner - Capital
Passive Income
39. Happenings that both affect an organization's financial position and can be reliably measured.
Events
Going-concern Assumptions
T Account
Balance Sheet
40. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Time Period Assumptions
Long Term Investments
Securities
Passive Income
41. 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.
Fixed Expense
Ledger
Common Stock
Plant Assets
42. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Securities and Exchange Commission
Debit
Journalizing
Trial balance
43. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Adjusted Trial Balance
Fiscal Year
Time Period Assumptions
Business Entity Assumption
44. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Intangible assets
Materiality Constraint
Risk
Accrued Revenues
45. Owners of a corporation who usually receive dividends. Also called shareholders.
Stockholders
Auditors
Post Closing Trial Balance
Conceptual Framework
46. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Closing process
International Financial Reporting Standards
Materiality Constraint
Expanded Accounting Equation
47. 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
Adjusting Entry
Time Period Assumptions
Sarbanes-Oxley Act (SOX)
Temporary Accounts
48. Exchanges of economic value between one entity and another entity.
External Transactions
Securities and Exchange Commission
Stockholders
Ledger
49. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Surplus
Posting
Journal
Pro Forma Financial Statement
50. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Recordkeeping
Varaiable Expense
Limited Liability Corporation
Deficit