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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. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Time Period Assumptions
Managerial Accounting
Varaiable Expense
Passive Income
2. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
NASDAQ
Adjusted Trial Balance
Trial balance
Ledger
3. 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
External Transactions
Sarbanes-Oxley Act (SOX)
Internal transactions
Fixed Expense
4. 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.
Federal Reserve System
International Financial Reporting Standards
Stock
Preferred Stock
5. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Sarbanes-Oxley Act (SOX)
General Journal
Money Market Account
Long Term Liabilities
6. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Risk Tolerance
Long Term Liabilities
Current Ratio
Debit
7. Statements that show the effect of proposed transactions and events as if they had occurred.
SMART Goal
Pro Forma Financial Statement
Post Closing Trial Balance
Unsecured Loan
8. 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
Full Disclosure Principle
Varaiable Expense
Balance Sheet
9. 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
Stock
Expanded Accounting Equation
Preferred Stock
Fiscal Year
10. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
External Transactions
Statement of Cash Flows
Surplus
Corporation
11. Journal entry at the end of an accounting period to bring an asset or liability account to its proper amount and update the related expenses or revenue account.
Ethics
Monetary Unit Assumption
SEC (Securites and Exchange Commision)
Adjusting Entry
12. 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
External Users
Generally Accepted Accounting Principles
Source Documents
13. The value of a future cash steam discounted at the appropriate market interest rate.
Long Term Liabilities
CD (Certificate of Deposit)
Trial balance
Present Value
14. Business owned by one person that is not organized as a corporation.
Business Entity Assumption
Matching Principle (or Expense Recognition Principle)
Closing Entries
Sole Proprietorship
15. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Bonds
Financial Accounting Standards Board
Net Income
NYSE (New York Stock Exchange)
16. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Reversing Entries
IPO
Corporations
Post Closing Trial Balance
17. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Double Entry Accounting
Accounting Cycle
Intangible assets
Money Market Account
18. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Passive Income
Surplus
Long Term Liabilities
Deficit
19. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Secured Loan
Partnership Agreement
General Journal
Journalizing
20. 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.
Interim Financial Statements
Account Balance
Natural Business Years
Expense Recognition Principle
21. Length of time covered by financial statements; also called reporting period.
Temporary Accounts
Accounting Period
Acquisition
Expenses
22. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Accounting Equation
Contra Account
Money Market Account
Debt Ratio
23. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Owner Withdrawals
Fiscal Year
Audit
T Account
24. Tool used to show the effects of transactions and events on individual accounts.
General Journal
Current Assets
T Account
Risk Tolerance
25. The twelve month period that ends when a company's sales activities are at their lowest point.
Natural Business Years
NYSE (New York Stock Exchange)
Bonds
Bookkeeping
26. 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.
Liabilities
Accounting
Audit
Measurement Principle
27. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Recordkeeping
Account
Cost Principle
Acquisition
28. 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
Expenses
Long Term Investments
Risk
NASDAQ
29. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
CD (Certificate of Deposit)
Limited Liability Corporation
Temporary Accounts
Accounting
30. Independent group of full-time members responsible for setting accounting rules.
Financial Accounting Standards Board
Risk Tolerance
Equity
Statement of Owner's Equity
31. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Securities and Exchange Commission
Securities
Intangible assets
IRA (Individual Retirement Account)
32. Process of recording transactions in a journal.
Journalizing
Sole Proprietorship
Pro Forma Financial Statement
Portfolio Income
33. Gross increase in equity from a company's business activities that earn income.
Reversing Entries
NASDAQ
Time Period Assumptions
Revenues
34. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Accrual Basis Accounting
International Financial Reporting Standards
Intangible assets
Going-concern Assumptions
35. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Credit
Present Value
Statement of Cash Flows
Accounting
36. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
SMART Goal
Time Period Assumptions
Source Documents
Partnership Agreement
37. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
NYSE (New York Stock Exchange)
Owner Withdrawals
Source Documents
Accounting Equation
38. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Intangible assets
Net Income
Varaiable Expense
Materiality Constraint
39. Persons using accounting information who are not directly involved in running the organization.
Stock
External Users
Posting
Income Summary
40. 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.
Accounting Equation
Matching Principle (or Expense Recognition Principle)
Owner - Capital
Partnership
41. An expense that changes from period to perio - such as food or gasoline costs.
Sarbanes-Oxley Act (SOX)
Pro Forma Financial Statement
Unearned Revenues
Varaiable Expense
42. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Risk Tolerance
Classified Balance Sheet
Matching Principle
Expense Recognition Principle
43. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
IRA (Individual Retirement Account)
Stock
External Transactions
Statement of Owner's Equity
44. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Journal
Accrued Expenses
Working Papers
Ethical Dilemma
45. Exchanges of economic value between one entity and another entity.
External Transactions
Partnership
Ledger
Book Value
46. Expenses that remain the same regardless of the circumstances.
Post Closing Trial Balance
NASDAQ
Fixed Expense
Return
47. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Matching Principle (or Expense Recognition Principle)
Sole Proprietorship
NASDAQ
Long Term Investments
48. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Net Income
Plant Assets
Unsecured Loan
Federal Reserve System
49. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Interim Financial Statements
Sole Proprietorship
International Accounting Standards Board
Full Disclosure Principle
50. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Auditors
Interim Financial Statements
Matching Principle (or Expense Recognition Principle)
Conceptual Framework