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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. Owners of a corporation who usually receive dividends. Also called stockholders.
Securities and Exchange Commission
Credit
Shareholders
IRA (Individual Retirement Account)
2. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Corporations
Straight-line Depreciation Method
Money Market Account
Source Documents
3. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Journalizing
Income Summary
Risk
Full Disclosure Principle
4. Business owned by a single person.
Temporary Accounts
Debt Ratio
Sole Propietorship
Operating Cycle
5. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Bailout
Profit Margin
Double Entry Accounting
Full Disclosure Principle
6. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Cash Basis Accounting
Pro Forma Financial Statement
Unearned Revenues
Partnership
7. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Debt Ratio
Bailout
Partnership Agreement
Sole Proprietorship
8. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Securities
Unadjusted Trial Balance
Reversing Entries
Ethical Dilemma
9. 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.
Depreciation
Accrued Revenues
Temporary Accounts
Cost Principle
10. 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
Chart of Accounts
Plant Assets
Temporary Accounts
11. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Deficit
Closing process
Shares
Stockholders
12. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Working Papers
Current Assets
Journalizing
Straight-line Depreciation Method
13. Independent group of full-time members responsible for setting accounting rules.
Closing process
Corporation
Limited Liability Corporation
Financial Accounting Standards Board
14. 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
Working Papers
Balance Column Account
Audit
15. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Generally Accepted Accounting Principles
Shareholders
Unearned Revenues
Profit Margin
16. Difference between total debits and total credits (including the beginning balance) for an account.
Permanent Accounts
Income Summary
Account Balance
Deficit
17. Outflows or using up of assets as part of operations of business to generate sales.
External Transactions
Expenses
Conceptual Framework
Managerial Accounting
18. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Common Stock
Balance Column Account
Business Entity Assumption
Annual Financial Statements
19. Area of accounting aimed mainly at serving external users.
Net Income
Expanded Accounting Equation
Auditors
Financial Accounting
20. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Return
Current Ratio
Business Entity Assumption
Posting
21. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Portfolio Income
Money Market Account
Internal transactions
Assets
22. Loaning or giving money to a business in orer to save it from bankruptcy.
Post Closing Trial Balance
Going-concern Assumptions
Operating Cycle
Bailout
23. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Debit
Unsecured Loan
Measurement Principle
Compound Journal Entries
24. 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.
Ethics
Ponzi Scheme
Shareholders
Sole Proprietorship
25. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Debtors
Partnership
Net Income
Varaiable Expense
26. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Business Entity Assumption
Cost-benefit Constraint
Ledger
Book Value
27. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Debtors
Measurement Principle
Current Liabilities
Ponzi Scheme
28. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Source Documents
Intangible assets
Contra Account
Ponzi Scheme
29. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Fixed Expense
Depreciation
Money Market Account
Accounting Equation
30. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Cost Principle
Cash Basis Accounting
Secured Loan
Matching Principle (or Expense Recognition Principle)
31. Persons using accounting information who are not directly involved in running the organization.
Accounting
Current Liabilities
External Users
Ponzi Scheme
32. A legal entity that is seperate from its owners.
Passive Income
Corporations
Generally Accepted Accounting Principles
Auditors
33. Individuals or organizations that owe money.
Debtors
Measurement Principle
Return on Assets
Straight-line Depreciation Method
34. 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.
Accounting Cycle
Reversing Entries
Expenses
Secured Loan
35. Accounting information is based on cost with potential subsequent adjustments to fair value.
Deficit
IPO
Measurement Principle
Internal transactions
36. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Owner Withdrawals
Income Statement
Trial balance
Bookkeeping
37. 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.
Account Balance
Federal Reserve System
Sarbanes-Oxley Act (SOX)
Corporation
38. Items paid for in advance of receiving their benefits. Classified as assets.
Prepaid Expenses
Risk Tolerance
Double Entry Accounting
Time Period Assumptions
39. Gross increase in equity from a company's business activities that earn income.
Risk
Ethical Dilemma
Conceptual Framework
Revenues
40. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership
Net Loss
Corporations
Varaiable Expense
41. Process of recording transactions in a journal.
Journalizing
Sarbanes-Oxley Act (SOX)
Events
Partnership Agreement
42. Assets pulled out of the business by the owner.
Mergers
Owner Withdrawals
Adjusted Trial Balance
Reversing Entries
43. Income from investments - including dividends - interest - or the sale of a property.
Portfolio Income
Compound Journal Entries
Adjusting Entry
Going-concern Assumptions
44. 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.
Income Statement
Net Income
Time Period Assumptions
Closing Entries
45. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Accrued Revenues
Passive Income
Materiality Constraint
46. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Operating Cycle
Return on Assets
Time Period Assumptions
Surplus
47. 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
Materiality Constraint
Cost Principle
Risk Tolerance
48. Report of changes in equity over a period; adjusted for increases and for decreases.
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49. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Risk
Journal
Permanent Accounts
Balance Column Account
50. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Depreciation
Classified Balance Sheet
Statement of Owner's Equity
General Journal