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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. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Straight-line Depreciation Method
Net Income
Income Statement
Cash Basis Accounting
2. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Ponzi Scheme
Unearned Revenues
Profit Margin
Cost Principle
3. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Secured Loan
Stockholders
Materiality Constraint
Business Entity Assumption
4. Entries recorded at the end of each accounting period to transfer end of period balances in revenue - gain - expense - loss - and withdrawal (dividend for a corporation) accounts to the capital account (to retain earnings for a corporation).
Bonds
Closing Entries
Shareholders
Stock
5. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
International Accounting Standards Board
Return
Monetary Unit Assumption
Full Disclosure Principle
6. A loan that is backed by collateral such as cars - houses - or other assets.
Accrued Expenses
Revenues
Limited Liability Corporation
Secured Loan
7. Area of accounting aimed mainly at serving external users.
Straight-line Depreciation Method
Financial Accounting
Source Documents
Full Disclosure Principle
8. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Working Papers
Bailout
Compound Journal Entries
Deficit
9. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Ponzi Scheme
Compound Journal Entries
Partnership
Bookkeeping
10. 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
Bailout
Accounting Cycle
Net Income
11. An expense that changes from period to perio - such as food or gasoline costs.
International Accounting Standards Board
Varaiable Expense
Prepaid Expenses
Internal users
12. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Shares
Accrued Revenues
Journalizing
NYSE (New York Stock Exchange)
13. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Discretionary Income
Accrued Expenses
Shares
Preferred Stock
14. Assets put into the business by the owner.
Posting Reference Column
Debtors
Profit Margin
Owner Investment
15. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Long Term Liabilities
NYSE (New York Stock Exchange)
Post Closing Trial Balance
Prepaid Expenses
16. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Owner Investment
International Financial Reporting Standards
Fiscal Year
Audit
17. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Shares
Ledger
Chart of Accounts
Straight-line Depreciation Method
18. Persons using accounting information who are not directly involved in running the organization.
External Users
Surplus
Bonds
Deficit
19. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Limited Liability Corporation
Working Papers
Ponzi Scheme
Source Documents
20. Report of changes in equity over a period; adjusted for increases and for decreases.
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21. The combining of two or more comapnies into one larger company.
Ethics
Mergers
Working Papers
Return
22. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Surplus
Debit
SMART Goal
Mergers
23. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Contra Account
Money Market Account
Depreciation
Going-concern Assumptions
24. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Net Income
Ethical Dilemma
Expanded Accounting Equation
External Transactions
25. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Balance Sheet
Current Assets
Time Period Assumptions
Fixed Expense
26. Monies (or sums of money) received from an investment; often in percent form.
Statement of Cash Flows
Statement of Owner's Equity
Return
Stock
27. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Long Term Liabilities
Bookkeeping
Financial Accounting
Stockholders
28. Persons using accounting information who are directly involved in managing the organization.
Journal
Statement of Cash Flows
IRA (Individual Retirement Account)
Internal users
29. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Account Balance
Deficit
External Transactions
Permanent Accounts
30. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Closing process
Full Disclosure Principle
Ethical Dilemma
Stockholders
31. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Cost Principle
CD (Certificate of Deposit)
Stockholders
Posting
32. Gross increase in equity from a company's business activities that earn income.
Cost Principle
Operating Cycle
Revenues
Unearned Revenue
33. Process of recording transactions in a journal.
Journalizing
Operating Cycle
Unsecured Loan
Corporations
34. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Unclassified Balance Sheets
CD (Certificate of Deposit)
Accounting Cycle
Securities and Exchange Commission
35. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
IRA (Individual Retirement Account)
Fixed Expense
Deficit
Accounting
36. Tool used to show the effects of transactions and events on individual accounts.
T Account
Measurement Principle
Statement of Cash Flows
Compound Journal Entries
37. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Book Value
Bailout
Accrued Revenues
Accounting
38. 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.
Matching Principle
Portfolio Income
Depreciation
Owner - Capital
39. 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.
Current Assets
Credit
Expense Recognition Principle
Account Balance
40. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Matching Principle
Unadjusted Trial Balance
Creditors
Double Entry Accounting
41. Activities within an organization that can affect the accounting equation.
Internal transactions
Common Stock
NASDAQ
Stockholders
42. Happenings that both affect an organization's financial position and can be reliably measured.
Partnership
Events
Common Stock
Expenses
43. 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.
Operating Cycle
Reversing Entries
Permanent Accounts
Preferred Stock
44. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Straight-line Depreciation Method
Statement of Owner's Equity
Time Period Assumptions
Owner Investment
45. 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
Owner Investment
IPO
Owner Withdrawals
46. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Current Liabilities
Owner - Capital
Acquisition
Securities and Exchange Commission
47. Business owned by a single person.
Mergers
Financial Accounting Standards Board
Business Entity Assumption
Sole Propietorship
48. Expenses that remain the same regardless of the circumstances.
Debit
Ethical Dilemma
Closing process
Fixed Expense
49. All purpose journal for recording the debits and credits of transactions and events.
Long Term Liabilities
Present Value
General Journal
Bailout
50. Prescribes expenses to be reported in the same period as the revenues that were eared as a result of the expenses. Also called the Expense Recognition Principle.
Securities
Accounting Equation
Partnership
Matching Principle