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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. Length of time covered by financial statements; also called reporting period.
Accounting Period
Events
Source Documents
Owner Investment
2. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Source Documents
Plant Assets
Recordkeeping
Cash Basis Accounting
3. Journal entries that affect at least three accounts.
Compound Journal Entries
Conceptual Framework
Straight-line Depreciation Method
Partnership
4. Process of recording transactions in a journal.
NASDAQ
Corporations
Balance Sheet
Journalizing
5. Rules that specify acceptable accounting practices.
Limited Liability Corporation
Journalizing
Account Balance
Generally Accepted Accounting Principles
6. Income from investments - including dividends - interest - or the sale of a property.
Matching Principle
Unadjusted Trial Balance
Portfolio Income
Accrued Expenses
7. Gross increase in equity from a company's business activities that earn income.
International Accounting Standards Board
Common Stock
Revenues
Intangible assets
8. A corporation's basic ownership share.
Working Papers
Common Stock
Book Value
Stockholders
9. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Corporations
Monetary Unit Assumption
Shares
Pro Forma Financial Statement
10. 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.
Varaiable Expense
Income Statement
Monetary Unit Assumption
Owner - Capital
11. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Operating Cycle
Intangible assets
General Journal
Accrued Expenses
12. 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.
Closing process
Classified Balance Sheet
Common Stock
Shares
13. Happenings that both affect an organization's financial position and can be reliably measured.
Sole Propietorship
Events
Fixed Expense
NASDAQ
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
Ledger
Fixed Expense
NASDAQ
Debtors
15. 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.
Classified Balance Sheet
Liabilities
Matching Principle
Posting
16. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Source Documents
Posting Reference Column
T Account
17. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Expanded Accounting Equation
SMART Goal
Accounting
Cash Basis Accounting
18. Expenses that remain the same regardless of the circumstances.
Long Term Investments
Matching Principle
Revenue Recognition Principle
Fixed Expense
19. Individuals or organizations that owe money.
Long Term Investments
Debtors
Accounting Period
Journal
20. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Statement of Cash Flows
Generally Accepted Accounting Principles
Current Liabilities
Debt Ratio
21. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Unsecured Loan
Straight-line Depreciation Method
Net Income
Assets
22. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
T Account
Full Disclosure Principle
Limited Liability Corporation
Fixed Expense
23. Items paid for in advance of receiving their benefits. Classified as assets.
Prepaid Expenses
Working Papers
Common Stock
Current Liabilities
24. Tool used to show the effects of transactions and events on individual accounts.
T Account
Adjusting Entry
Corporation
Depreciation
25. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
NYSE (New York Stock Exchange)
Straight-line Depreciation Method
Owner Withdrawals
26. 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.
Matching Principle
Depreciation
Deficit
General Journal
27. 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
Matching Principle
Statement of Owner's Equity
Bonds
28. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Fiscal Year
Ledger
Temporary Accounts
Unearned Revenue
29. The first time a company sells shares of its stock to the public.
Account
Time Period Assumptions
IPO
Varaiable Expense
30. Persons using accounting information who are directly involved in managing the organization.
Interim Financial Statements
Creditors
Internal users
Debt Ratio
31. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Cost-benefit Constraint
Account Balance
Sole Proprietorship
Matching Principle
32. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Account Balance
CD (Certificate of Deposit)
Expenses
Current Ratio
33. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Generally Accepted Accounting Principles
Contra Account
Expense Recognition Principle
Cost Principle
34. Goals that are specific - measurable - attainable - realistic - and time bound.
Full Disclosure Principle
Natural Business Years
SMART Goal
Statement of Cash Flows
35. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Materiality Constraint
Accounting Period
Surplus
Classified Balance Sheet
36. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Corporation
Time Period Assumptions
Current Liabilities
Preferred Stock
37. The twelve month period that ends when a company's sales activities are at their lowest point.
Generally Accepted Accounting Principles
NASDAQ
Natural Business Years
Risk Tolerance
38. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Materiality Constraint
Accounting Cycle
Balance Column Account
Current Ratio
39. 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.
International Financial Reporting Standards
Permanent Accounts
Journalizing
Accrued Expenses
40. 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.
Unearned Revenue
Creditors
Ponzi Scheme
Secured Loan
41. 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
Surplus
Revenues
Sarbanes-Oxley Act (SOX)
Full Disclosure Principle
42. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Fiscal Year
Temporary Accounts
Interim Financial Statements
Ethical Dilemma
43. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Credit
International Accounting Standards Board
Adjusting Entry
International Financial Reporting Standards
44. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Debt Ratio
Current Ratio
Operating Cycle
Fixed Expense
45. List of accounts used by a company' includes and identification number for each account.
Contra Account
Temporary Accounts
Chart of Accounts
Bonds
46. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Going-concern Assumptions
Current Liabilities
General Journal
47. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Creditors
Internal transactions
Current Assets
Accounting Equation
48. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Balance Sheet
Stock
Cost Principle
Discretionary Income
49. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Bailout
Passive Income
Accounting Period
Debt Ratio
50. Individuals or organizations entitled to receive payments
Debit
NYSE (New York Stock Exchange)
IRA (Individual Retirement Account)
Creditors