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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. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Book Value
Current Liabilities
Events
Deficit
2. Accounting information is based on cost with potential subsequent adjustments to fair value.
Current Liabilities
Managerial Accounting
Measurement Principle
Posting
3. A legal entity that is seperate from its owners.
Corporations
Accounting Cycle
Permanent Accounts
Shareholders
4. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Money Market Account
Source Documents
Expenses
Unearned Revenue
5. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Bookkeeping
Balance Sheet
Shares
Risk
6. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Recordkeeping
Sole Proprietorship
Sarbanes-Oxley Act (SOX)
Materiality Constraint
7. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Owner Investment
Book Value
Assets
Passive Income
8. Loaning or giving money to a business in orer to save it from bankruptcy.
Corporations
Bailout
Net Loss
NASDAQ
9. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Unclassified Balance Sheets
Portfolio Income
Interim Financial Statements
Unearned Revenue
10. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
NYSE (New York Stock Exchange)
T Account
Shareholders
Closing process
11. 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.
Prepaid Expenses
Ethics
Preferred Stock
Income Statement
12. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenue
Debtors
Business Entity Assumption
Liabilities
13. 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
Unclassified Balance Sheets
Risk
Sarbanes-Oxley Act (SOX)
Book Value
14. Business owned by a single person.
Securities
Common Stock
Prepaid Expenses
Sole Propietorship
15. Individuals or organizations entitled to receive payments
Matching Principle (or Expense Recognition Principle)
Money Market Account
Creditors
Closing Entries
16. Owners of a corporation who usually receive dividends. Also called stockholders.
Owner Withdrawals
Expense Recognition Principle
Matching Principle
Shareholders
17. The combining of two or more comapnies into one larger company.
Credit
Mergers
Events
Journal
18. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Temporary Accounts
Matching Principle (or Expense Recognition Principle)
Plant Assets
Financial Accounting Standards Board
19. Outflows or using up of assets as part of operations of business to generate sales.
Assets
Expenses
Statement of Owner's Equity
Return
20. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Corporations
Ponzi Scheme
Intangible assets
Contra Account
21. 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
General Journal
Cost Principle
Accrued Revenues
22. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
IPO
Accrual Basis Accounting
Account
Audit
23. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Internal transactions
Preferred Stock
International Accounting Standards Board
Owner Investment
24. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Operating Cycle
Passive Income
Unearned Revenues
Post Closing Trial Balance
25. Owners of a corporation who usually receive dividends. Also called shareholders.
Classified Balance Sheet
Ledger
Stockholders
Cost-benefit Constraint
26. Uncertainty about expected return.
Risk Tolerance
Materiality Constraint
Risk
Business Entity Assumption
27. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Monetary Unit Assumption
Matching Principle
Long Term Liabilities
Secured Loan
28. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Unearned Revenue
Current Assets
Statement of Cash Flows
Partnership Agreement
29. Report of changes in equity over a period; adjusted for increases and for decreases.
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30. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Surplus
Depreciation
Monetary Unit Assumption
Profit Margin
31. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Unadjusted Trial Balance
Ethical Dilemma
CD (Certificate of Deposit)
Posting Reference Column
32. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Matching Principle
Ledger
Straight-line Depreciation Method
Accrued Expenses
33. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Assets
T Account
Journalizing
Working Papers
34. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Limited Liability Corporation
Audit
Mergers
Straight-line Depreciation Method
35. The first time a company sells shares of its stock to the public.
Current Ratio
Equity
Current Assets
IPO
36. Goals that are specific - measurable - attainable - realistic - and time bound.
Statement of Cash Flows
SMART Goal
Audit
Risk
37. Process of recording transactions in a journal.
Revenue Recognition Principle
Expanded Accounting Equation
Long Term Investments
Journalizing
38. Area of accounting aimed mainly at serving external users.
Surplus
Financial Accounting
Fiscal Year
Depreciation
39. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Cash Basis Accounting
Preferred Stock
Closing process
Expense Recognition Principle
40. Gross increase in equity from a company's business activities that earn income.
IRA (Individual Retirement Account)
Straight-line Depreciation Method
Shareholders
Revenues
41. Items paid for in advance of receiving their benefits. Classified as assets.
Prepaid Expenses
Generally Accepted Accounting Principles
Compound Journal Entries
Securities and Exchange Commission
42. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Stock
Classified Balance Sheet
Matching Principle (or Expense Recognition Principle)
Profit Margin
43. Business owned by two or more people.
Present Value
Partnership
Credit
Income Statement
44. Journal entries that affect at least three accounts.
Compound Journal Entries
Annual Financial Statements
Audit
Limited Liability Corporation
45. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Accounting
Expenses
Journalizing
Acquisition
46. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Varaiable Expense
Post Closing Trial Balance
Accounting Cycle
Ledger
47. 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.
Net Loss
Journalizing
Adjusting Entry
Balance Column Account
48. The value of a future cash steam discounted at the appropriate market interest rate.
Current Ratio
Present Value
Passive Income
Owner Investment
49. A corporation's basic ownership share.
Common Stock
Owner Withdrawals
Intangible assets
Managerial Accounting
50. Rules that specify acceptable accounting practices.
General Journal
Accounting Cycle
Generally Accepted Accounting Principles
Unearned Revenues