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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. The money left over when income exceeds expenditure.
Surplus
Bailout
Audit
Double Entry Accounting
2. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Conceptual Framework
Managerial Accounting
Fixed Expense
3. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
International Accounting Standards Board
Ethics
Owner - Capital
Recordkeeping
4. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Unearned Revenues
Sole Propietorship
Financial Accounting
Current Ratio
5. Independent group of full-time members responsible for setting accounting rules.
Ethics
Account Balance
Reversing Entries
Financial Accounting Standards Board
6. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Auditors
Securities
Cost Principle
Ponzi Scheme
7. Loaning or giving money to a business in orer to save it from bankruptcy.
Financial Accounting Standards Board
Bailout
Present Value
Bookkeeping
8. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Net Loss
Time Period Assumptions
Revenue Recognition Principle
Cash Basis Accounting
9. Individuals or organizations entitled to receive payments
Portfolio Income
Creditors
Statement of Cash Flows
Interim Financial Statements
10. Record containing all accounts (with amounts) for a business.
Fiscal Year
Ledger
Managerial Accounting
International Financial Reporting Standards
11. Assets pulled out of the business by the owner.
Stockholders
Discretionary Income
Risk
Owner Withdrawals
12. Activities within an organization that can affect the accounting equation.
Common Stock
IRA (Individual Retirement Account)
Internal transactions
Trial balance
13. Income that is available after all of the essential financial commitments have been paid.
Adjusting Entry
Posting Reference Column
Discretionary Income
Post Closing Trial Balance
14. All purpose journal for recording the debits and credits of transactions and events.
Owner Investment
Revenue Recognition Principle
Surplus
General Journal
15. Area of accounting aimed mainly at serving external users.
Annual Financial Statements
Financial Accounting
Post Closing Trial Balance
Present Value
16. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Operating Cycle
Time Period Assumptions
SEC (Securites and Exchange Commision)
Financial Accounting
17. Persons using accounting information who are not directly involved in running the organization.
Managerial Accounting
Discretionary Income
Income Summary
External Users
18. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Net Loss
Preferred Stock
Stock
Closing process
19. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Journalizing
Assets
Corporations
Account
20. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
CD (Certificate of Deposit)
Recordkeeping
Expense Recognition Principle
Income Statement
21. The twelve month period that ends when a company's sales activities are at their lowest point.
Interim Financial Statements
Partnership Agreement
Natural Business Years
Corporations
22. A corporation's basic ownership share.
Risk Tolerance
Book Value
Common Stock
Current Ratio
23. Business owned by a single person.
Sole Propietorship
Matching Principle
Ethics
Money Market Account
24. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Ledger
Double Entry Accounting
Balance Column Account
Current Ratio
25. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Annual Financial Statements
Current Assets
Accounting
Adjusting Entry
26. Monies (or sums of money) received from an investment; often in percent form.
Long Term Investments
Revenues
Return
Working Papers
27. Assets put into the business by the owner.
Discretionary Income
Shareholders
Owner Investment
Time Period Assumptions
28. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
Annual Financial Statements
Time Period Assumptions
Accrued Expenses
29. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Ledger
Accounting Equation
Profit Margin
Accrued Expenses
30. Individuals or organizations that owe money.
Credit
Plant Assets
Debtors
Deficit
31. 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
Stockholders
Expanded Accounting Equation
Common Stock
Discretionary Income
32. A tax deferred account that allows individuals to plan for their retirement.
Work Sheet
Cash Basis Accounting
IRA (Individual Retirement Account)
IPO
33. Items paid for in advance of receiving their benefits. Classified as assets.
Prepaid Expenses
Internal users
Unclassified Balance Sheets
Time Period Assumptions
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.
Deficit
Trial balance
Ponzi Scheme
Financial Accounting
35. Length of time covered by financial statements; also called reporting period.
Journalizing
IRA (Individual Retirement Account)
Creditors
Accounting Period
36. The principle prescribing that revenue is recognized when earned.
Prepaid Expenses
Pro Forma Financial Statement
Balance Column Account
Revenue Recognition Principle
37. 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
Book Value
Risk
Straight-line Depreciation Method
38. 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.
Intangible assets
Reversing Entries
Net Income
Fiscal Year
39. A loan that is backed by collateral such as cars - houses - or other assets.
Accrual Basis Accounting
Accrued Expenses
Secured Loan
Bonds
40. 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.
SMART Goal
Debtors
Intangible assets
Accrued Revenues
41. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Ethical Dilemma
Adjusting Entry
Intangible assets
Sole Proprietorship
42. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Owner - Capital
Current Assets
Chart of Accounts
Balance Column Account
43. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Financial Accounting
Ethics
Adjusting Entry
Going-concern Assumptions
44. Tool used to show the effects of transactions and events on individual accounts.
T Account
Post Closing Trial Balance
Expanded Accounting Equation
Full Disclosure Principle
45. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Unsecured Loan
Partnership Agreement
Accounting
SEC (Securites and Exchange Commision)
46. 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).
Corporations
Income Summary
Financial Accounting Standards Board
Long Term Investments
47. List of accounts used by a company' includes and identification number for each account.
Limited Liability Corporation
SMART Goal
Chart of Accounts
Contra Account
48. The first time a company sells shares of its stock to the public.
Posting Reference Column
IPO
Expenses
Conceptual Framework
49. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Conceptual Framework
Common Stock
Cost Principle
Balance Sheet
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.
Mergers
Adjusted Trial Balance
Matching Principle
Business Entity Assumption