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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. Area of accounting aimed mainly at serving external users.
Financial Accounting
Partnership Agreement
Business Entity Assumption
Accrued Revenues
2. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Internal transactions
NASDAQ
NYSE (New York Stock Exchange)
3. Owners of a corporation who usually receive dividends. Also called shareholders.
Profit Margin
SEC (Securites and Exchange Commision)
Stockholders
Internal users
4. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Conceptual Framework
Sole Propietorship
Posting
Sarbanes-Oxley Act (SOX)
5. All purpose journal for recording the debits and credits of transactions and events.
Current Liabilities
Present Value
General Journal
Profit Margin
6. 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.
Closing Entries
Federal Reserve System
Accrued Revenues
Contra Account
7. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Debit
Double Entry Accounting
NASDAQ
Money Market Account
8. 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
IPO
Expanded Accounting Equation
T Account
Depreciation
9. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Posting
Common Stock
Return
Financial Accounting Standards Board
10. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Risk
Compound Journal Entries
Work Sheet
Current Ratio
11. 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
Classified Balance Sheet
International Accounting Standards Board
NASDAQ
Debit
12. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Money Market Account
Materiality Constraint
Net Income
Pro Forma Financial Statement
13. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Corporation
Common Stock
Current Assets
Common Stock
14. Owners of a corporation who usually receive dividends. Also called stockholders.
Shareholders
Time Period Assumptions
Liabilities
Debtors
15. 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
Unearned Revenues
Preferred Stock
Current Liabilities
Going-concern Assumptions
16. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Bookkeeping
Surplus
Events
Limited Liability Corporation
17. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Full Disclosure Principle
Revenue Recognition Principle
Reversing Entries
Depreciation
18. The NYSE was founded in 1792 and is the oldest and larvest securities market in the United States. it is located on Wall Street in New York.
Permanent Accounts
Revenues
NYSE (New York Stock Exchange)
Securities
19. The money left over when income exceeds expenditure.
Plant Assets
Surplus
Intangible assets
Return on Assets
20. 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.
Adjusting Entry
Ledger
Current Assets
Common Stock
21. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Source Documents
Adjusted Trial Balance
Financial Accounting Standards Board
Expenses
22. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Federal Reserve System
Bookkeeping
Temporary Accounts
Adjusted Trial Balance
23. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
International Accounting Standards Board
Adjusting Entry
Events
Long Term Investments
24. Monies (or sums of money) received from an investment; often in percent form.
Time Period Assumptions
Return
Temporary Accounts
Shareholders
25. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Sarbanes-Oxley Act (SOX)
Current Assets
Current Ratio
Balance Sheet
26. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Adjusting Entry
Owner - Capital
Compound Journal Entries
Unearned Revenue
27. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Revenue Recognition Principle
Conceptual Framework
Statement of Cash Flows
Discretionary Income
28. Business owned by two or more people.
Closing Entries
Unclassified Balance Sheets
Partnership
Depreciation
29. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Financial Accounting Standards Board
Risk Tolerance
Cash Basis Accounting
Accrual Basis Accounting
30. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Accrual Basis Accounting
Liabilities
Assets
CD (Certificate of Deposit)
31. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Cost-benefit Constraint
Double Entry Accounting
Owner - Capital
32. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Balance Sheet
Bookkeeping
Current Ratio
Going-concern Assumptions
33. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Operating Cycle
Audit
Discretionary Income
Owner Withdrawals
34. 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.
Classified Balance Sheet
Sole Proprietorship
Mergers
Ponzi Scheme
35. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Full Disclosure Principle
Account
Long Term Investments
Expense Recognition Principle
36. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Risk
Accrued Revenues
Double Entry Accounting
Balance Column Account
37. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Varaiable Expense
NASDAQ
Risk Tolerance
Temporary Accounts
38. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Long Term Investments
Cost-benefit Constraint
Prepaid Expenses
Discretionary Income
39. Independent group of full-time members responsible for setting accounting rules.
Straight-line Depreciation Method
Classified Balance Sheet
Income Summary
Financial Accounting Standards Board
40. A legal entity that is seperate from its owners.
Accrual Basis Accounting
Risk
Statement of Cash Flows
Corporations
41. Happenings that both affect an organization's financial position and can be reliably measured.
Net Income
Present Value
Account
Events
42. Items paid for in advance of receiving their benefits. Classified as assets.
Prepaid Expenses
Plant Assets
Partnership
Accounting Equation
43. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Fixed Expense
Stock
Partnership
Unsecured Loan
44. Assets pulled out of the business by the owner.
Owner Withdrawals
Varaiable Expense
Current Assets
Sole Propietorship
45. Activities within an organization that can affect the accounting equation.
Financial Accounting Standards Board
Internal transactions
Expense Recognition Principle
Accrual Basis Accounting
46. Rules that specify acceptable accounting practices.
Limited Liability Corporation
Intangible assets
Generally Accepted Accounting Principles
Audit
47. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Recordkeeping
Post Closing Trial Balance
Partnership
Cash Basis Accounting
48. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Statement of Owner's Equity
Compound Journal Entries
Cash Basis Accounting
Book Value
49. 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).
Reversing Entries
Return on Assets
Income Summary
Accrued Expenses
50. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Cost Principle
Net Income
Expense Recognition Principle
NASDAQ