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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. Debt securities that are issued by a borrower to raise capital . Bonds guarantee payments of the original amount borrowe plus interest and/or repayable on a fixed rate when the bond matures.
Securities and Exchange Commission
Stock
Long Term Liabilities
Bonds
2. Record containing all accounts (with amounts) for a business.
Unearned Revenue
SEC (Securites and Exchange Commision)
Ledger
Operating Cycle
3. Loaning or giving money to a business in orer to save it from bankruptcy.
Ethics
Ethical Dilemma
Bailout
Pro Forma Financial Statement
4. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Expense Recognition Principle
Operating Cycle
Statement of Cash Flows
Ethics
5. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Shares
Balance Sheet
Portfolio Income
6. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Posting Reference Column
Full Disclosure Principle
Matching Principle
Securities
7. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Accounting Period
Going-concern Assumptions
Accrued Revenues
Acquisition
8. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Unsecured Loan
Current Liabilities
Return
Sole Proprietorship
9. 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.
Audit
Debt Ratio
Straight-line Depreciation Method
Expense Recognition Principle
10. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Audit
Secured Loan
Full Disclosure Principle
Time Period Assumptions
11. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Discretionary Income
Expenses
Work Sheet
Bonds
12. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Ethical Dilemma
Accrued Expenses
Events
Ledger
13. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Chart of Accounts
Unadjusted Trial Balance
Depreciation
Net Loss
14. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
External Transactions
Securities
Closing process
Posting Reference Column
15. A legal entity that is seperate from its owners.
Limited Liability Corporation
General Journal
Corporations
Revenues
16. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Closing Entries
Expanded Accounting Equation
Current Ratio
Monetary Unit Assumption
17. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Auditors
Cost-benefit Constraint
Audit
Closing process
18. Owners of a corporation who usually receive dividends. Also called shareholders.
Stockholders
Income Summary
Chart of Accounts
Matching Principle (or Expense Recognition Principle)
19. Individuals hired to review financial reports and information systems of organizations.
Unearned Revenues
Liabilities
Current Liabilities
Auditors
20. Statements that show the effect of proposed transactions and events as if they had occurred.
Expenses
Balance Column Account
Pro Forma Financial Statement
Materiality Constraint
21. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Time Period Assumptions
Ponzi Scheme
Unsecured Loan
Bookkeeping
22. 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
Present Value
Cost-benefit Constraint
Sarbanes-Oxley Act (SOX)
Liabilities
23. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Liabilities
Managerial Accounting
Accounting
Equity
24. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Liabilities
Unclassified Balance Sheets
Post Closing Trial Balance
Statement of Owner's Equity
25. Report of changes in equity over a period; adjusted for increases and for decreases.
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26. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
Money Market Account
Common Stock
Risk
27. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Assets
IRA (Individual Retirement Account)
Accounting
Time Period Assumptions
28. A loan that is backed by collateral such as cars - houses - or other assets.
Managerial Accounting
Secured Loan
Owner Investment
Partnership Agreement
29. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Accrual Basis Accounting
Events
IPO
Common Stock
30. 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.
Internal users
Interim Financial Statements
International Financial Reporting Standards
Post Closing Trial Balance
31. Business owned by a single person.
Accrued Expenses
Sole Propietorship
Accounting
Liabilities
32. 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
Time Period Assumptions
Contra Account
Compound Journal Entries
Preferred Stock
33. Monies (or sums of money) received from an investment; often in percent form.
Return
Debt Ratio
Permanent Accounts
Generally Accepted Accounting Principles
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
Income Statement
Partnership
IRA (Individual Retirement Account)
35. Process of transferring journal entry information to the ledger; computerized systems automate this process.
External Users
Income Summary
Posting
Stock
36. 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.
Temporary Accounts
Corporation
Return on Assets
Income Statement
37. 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
Accounting
NASDAQ
Shares
Current Ratio
38. Optional entries recorded at the beginning of a period that prepare the accounts for the usual journal entries as if adjusting entries had not occurred in the prior period.
Audit
Reversing Entries
Financial Accounting Standards Board
Journal
39. Accounting information is based on cost with potential subsequent adjustments to fair value.
Expanded Accounting Equation
Balance Column Account
Sole Proprietorship
Measurement Principle
40. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Adjusted Trial Balance
Debit
Account
External Transactions
41. Process of recording transactions in a journal.
Ponzi Scheme
Journalizing
Long Term Investments
Posting
42. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Contra Account
Interim Financial Statements
Secured Loan
Accrued Revenues
43. Area of accounting aimed mainly at serving external users.
External Transactions
CD (Certificate of Deposit)
Financial Accounting
Long Term Liabilities
44. 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.
Ponzi Scheme
Revenues
Statement of Cash Flows
Operating Cycle
45. Length of time covered by financial statements; also called reporting period.
Accounting
Accounting Period
Sole Proprietorship
Account Balance
46. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Plant Assets
Income Statement
Common Stock
International Accounting Standards Board
47. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Unearned Revenue
Long Term Investments
Balance Sheet
Owner - Capital
48. Uncertainty about expected return.
Ledger
Risk
Profit Margin
Limited Liability Corporation
49. Expenses that remain the same regardless of the circumstances.
Journalizing
Fixed Expense
Straight-line Depreciation Method
Creditors
50. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Straight-line Depreciation Method
Fixed Expense
External Users
Time Period Assumptions