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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. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
NYSE (New York Stock Exchange)
Money Market Account
Materiality Constraint
NASDAQ
2. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
Adjusted Trial Balance
Natural Business Years
Audit
3. Assets pulled out of the business by the owner.
Owner Withdrawals
External Users
Accrued Expenses
Owner - Capital
4. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Cost Principle
Accounting Cycle
Ethics
Fiscal Year
5. Area of accounting aimed mainly at serving external users.
Going-concern Assumptions
Financial Accounting
Straight-line Depreciation Method
Current Ratio
6. 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.
Adjusting Entry
External Transactions
T Account
Reversing Entries
7. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Permanent Accounts
Income Summary
Contra Account
Measurement Principle
8. The first time a company sells shares of its stock to the public.
IPO
Annual Financial Statements
Matching Principle
Chart of Accounts
9. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Closing process
Accrual Basis Accounting
External Users
Adjusting Entry
10. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Recordkeeping
Journal
Account
Securities and Exchange Commission
11. Monies (or sums of money) received from an investment; often in percent form.
Revenue Recognition Principle
Return
Book Value
SEC (Securites and Exchange Commision)
12. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Balance Column Account
Annual Financial Statements
Revenues
Accrued Expenses
13. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Intangible assets
International Accounting Standards Board
Accounting
Securities
14. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Unadjusted Trial Balance
Accrual Basis Accounting
Common Stock
Unclassified Balance Sheets
15. Process of recording transactions in a journal.
Full Disclosure Principle
Journalizing
Adjusting Entry
Events
16. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Long Term Investments
Partnership
Unsecured Loan
Source Documents
17. Length of time covered by financial statements; also called reporting period.
Conceptual Framework
Partnership
Accounting Period
Common Stock
18. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Time Period Assumptions
Securities and Exchange Commission
Accounting
Full Disclosure Principle
19. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Sole Propietorship
Portfolio Income
Long Term Investments
Closing process
20. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Secured Loan
Source Documents
Audit
Posting Reference Column
21. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Expenses
Corporation
Mergers
Book Value
22. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Shareholders
Debt Ratio
Partnership Agreement
Expenses
23. 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.
Adjusting Entry
Measurement Principle
Classified Balance Sheet
Securities and Exchange Commission
24. Business owned by a single person.
Sole Propietorship
Materiality Constraint
Fixed Expense
Chart of Accounts
25. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Bailout
Depreciation
Deficit
Journal
26. Loaning or giving money to a business in orer to save it from bankruptcy.
Cost Principle
Partnership Agreement
Bailout
Account Balance
27. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Ledger
Income Summary
Securities and Exchange Commission
Assets
28. Owners of a corporation who usually receive dividends. Also called stockholders.
Debt Ratio
Depreciation
Shareholders
Adjusted Trial Balance
29. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Ledger
Cost Principle
International Accounting Standards Board
Closing Entries
30. Gross increase in equity from a company's business activities that earn income.
Account Balance
Revenues
Unearned Revenues
Prepaid Expenses
31. 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.
Expense Recognition Principle
Corporations
Debtors
Journalizing
32. The value of a future cash steam discounted at the appropriate market interest rate.
Intangible assets
Debit
Bonds
Present Value
33. Items paid for in advance of receiving their benefits. Classified as assets.
Varaiable Expense
Recordkeeping
Financial Accounting
Prepaid Expenses
34. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Cash Basis Accounting
Limited Liability Corporation
General Journal
Unadjusted Trial Balance
35. Activities within an organization that can affect the accounting equation.
Portfolio Income
Owner Investment
Internal transactions
Income Statement
36. A tax deferred account that allows individuals to plan for their retirement.
Long Term Investments
Prepaid Expenses
SEC (Securites and Exchange Commision)
IRA (Individual Retirement Account)
37. Tool used to show the effects of transactions and events on individual accounts.
T Account
Varaiable Expense
Intangible assets
Accounting Period
38. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Return
Corporation
Monetary Unit Assumption
Operating Cycle
39. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Common Stock
Return on Assets
Cost Principle
Owner Withdrawals
40. 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
Trial balance
Debit
Classified Balance Sheet
41. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Matching Principle
Trial balance
Portfolio Income
Income Summary
42. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Cash Basis Accounting
Classified Balance Sheet
Straight-line Depreciation Method
Internal transactions
43. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Unsecured Loan
SEC (Securites and Exchange Commision)
Ponzi Scheme
Owner - Capital
44. Principle that assumes transactions and events can be expressed in money units.
Bookkeeping
Monetary Unit Assumption
Depreciation
Debtors
45. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
General Journal
Business Entity Assumption
Depreciation
Net Income
46. An expense that changes from period to perio - such as food or gasoline costs.
Owner - Capital
Income Summary
Measurement Principle
Varaiable Expense
47. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Common Stock
Stockholders
Acquisition
Audit
48. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Double Entry Accounting
Plant Assets
Temporary Accounts
Sole Proprietorship
49. Assets put into the business by the owner.
Matching Principle (or Expense Recognition Principle)
Owner Investment
Business Entity Assumption
Deficit
50. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Equity
Annual Financial Statements
Unsecured Loan
Managerial Accounting