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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. List of accounts used by a company' includes and identification number for each account.
Unadjusted Trial Balance
Generally Accepted Accounting Principles
Events
Chart of Accounts
2. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Accrued Revenues
Auditors
Straight-line Depreciation Method
Assets
3. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Contra Account
Intangible assets
Posting
Discretionary Income
4. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Federal Reserve System
Financial Accounting Standards Board
Securities
Net Loss
5. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Plant Assets
Money Market Account
Generally Accepted Accounting Principles
Cost Principle
6. All purpose journal for recording the debits and credits of transactions and events.
Revenues
Ethics
General Journal
Cost-benefit Constraint
7. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
Revenue Recognition Principle
Adjusting Entry
NASDAQ
International Accounting Standards Board
8. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Operating Cycle
Current Ratio
Expense Recognition Principle
Internal users
9. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Depreciation
Internal transactions
Compound Journal Entries
Preferred Stock
10. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Long Term Liabilities
Corporation
Expanded Accounting Equation
Revenue Recognition Principle
11. 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
Balance Column Account
Accrued Expenses
Preferred Stock
Adjusting Entry
12. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Matching Principle (or Expense Recognition Principle)
Ponzi Scheme
SEC (Securites and Exchange Commision)
Materiality Constraint
13. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Straight-line Depreciation Method
Time Period Assumptions
Limited Liability Corporation
Permanent Accounts
14. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Shares
Ethics
Work Sheet
Debtors
15. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Source Documents
Account Balance
Unadjusted Trial Balance
Partnership
16. Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
Posting Reference Column
Ethical Dilemma
Full Disclosure Principle
Owner - Capital
17. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Temporary Accounts
Passive Income
Creditors
Money Market Account
18. Assets pulled out of the business by the owner.
Unearned Revenues
Portfolio Income
Accounting Equation
Owner Withdrawals
19. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Common Stock
IPO
Accrued Revenues
Deficit
20. Tool used to show the effects of transactions and events on individual accounts.
Time Period Assumptions
Sole Proprietorship
T Account
Net Loss
21. Process of recording transactions in a journal.
Income Statement
Journalizing
Closing Entries
Bonds
22. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Portfolio Income
Balance Column Account
Fixed Expense
Money Market Account
23. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Straight-line Depreciation Method
Double Entry Accounting
Operating Cycle
Owner Investment
24. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Partnership Agreement
Unclassified Balance Sheets
Accounting Cycle
Unsecured Loan
25. Income from investments - including dividends - interest - or the sale of a property.
Stockholders
Portfolio Income
Matching Principle
Cost Principle
26. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Balance Sheet
Surplus
Accounting
NASDAQ
27. 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.
Internal users
Owner - Capital
Current Ratio
Fixed Expense
28. The NYSE was founded in 1792 and is the oldest and larvest securities market in the United States. it is located on Wall Street in New York.
Shares
Bonds
Debit
NYSE (New York Stock Exchange)
29. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Accrued Expenses
Current Liabilities
Liabilities
Cost-benefit Constraint
30. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Business Entity Assumption
Unearned Revenues
Current Liabilities
Unsecured Loan
31. The money left over when income exceeds expenditure.
Pro Forma Financial Statement
Statement of Owner's Equity
Surplus
Trial balance
32. Business owned by one person that is not organized as a corporation.
Bookkeeping
Sole Proprietorship
Classified Balance Sheet
Return
33. Owners of a corporation who usually receive dividends. Also called shareholders.
Unearned Revenue
Corporations
Stockholders
Cost Principle
34. Outflows or using up of assets as part of operations of business to generate sales.
Ethical Dilemma
Contra Account
Temporary Accounts
Expenses
35. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Internal users
Current Ratio
Common Stock
Time Period Assumptions
36. The twelve month period that ends when a company's sales activities are at their lowest point.
Natural Business Years
Balance Column Account
Bailout
Closing process
37. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Ledger
Temporary Accounts
Portfolio Income
Net Income
38. Income that is available after all of the essential financial commitments have been paid.
Managerial Accounting
Accrued Revenues
Debt Ratio
Discretionary Income
39. Activities within an organization that can affect the accounting equation.
Cost-benefit Constraint
T Account
Corporations
Internal transactions
40. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Accounting Cycle
Conceptual Framework
Statement of Owner's Equity
Profit Margin
41. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Return on Assets
Ethical Dilemma
Accounting
Working Papers
42. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Ethical Dilemma
Posting Reference Column
Sarbanes-Oxley Act (SOX)
Accounting Period
43. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Sarbanes-Oxley Act (SOX)
Current Assets
Recordkeeping
CD (Certificate of Deposit)
44. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Account Balance
Corporation
Long Term Investments
Internal users
45. 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.
International Financial Reporting Standards
Corporations
Risk
Reversing Entries
46. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Recordkeeping
Work Sheet
Reversing Entries
External Users
47. Exchanges of economic value between one entity and another entity.
Partnership
Posting
Shares
External Transactions
48. The combining of two or more comapnies into one larger company.
Preferred Stock
Double Entry Accounting
Accounting Equation
Mergers
49. 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
SMART Goal
Common Stock
Portfolio Income
50. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Acquisition
Account Balance
Sole Propietorship
Owner - Capital