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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. 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.
Expenses
Common Stock
Trial balance
Adjusting Entry
2. 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.
Debt Ratio
Unsecured Loan
Current Assets
Liabilities
3. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Interim Financial Statements
Unsecured Loan
Ethics
Accounting Period
4. Independent group of full-time members responsible for setting accounting rules.
Accounting Cycle
Equity
Fixed Expense
Financial Accounting Standards Board
5. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Corporation
Balance Sheet
NASDAQ
Net Loss
6. Statements that show the effect of proposed transactions and events as if they had occurred.
Balance Column Account
Compound Journal Entries
Pro Forma Financial Statement
Money Market Account
7. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Common Stock
Accrued Revenues
Passive Income
Reversing Entries
8. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Closing process
Statement of Cash Flows
Discretionary Income
Bailout
9. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Permanent Accounts
Ledger
Shares
Securities
10. Principle that assumes transactions and events can be expressed in money units.
Contra Account
Passive Income
Accrued Expenses
Monetary Unit Assumption
11. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
International Accounting Standards Board
Expenses
External Users
Closing Entries
12. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Cost-benefit Constraint
Ethics
Account
Fixed Expense
13. Loaning or giving money to a business in orer to save it from bankruptcy.
Source Documents
Bailout
Events
Going-concern Assumptions
14. Area of accounting aimed mainly at serving external users.
Plant Assets
Cost-benefit Constraint
Financial Accounting
Closing process
15. Exchanges of economic value between one entity and another entity.
Securities and Exchange Commission
External Transactions
Time Period Assumptions
Discretionary Income
16. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Materiality Constraint
Securities and Exchange Commission
Annual Financial Statements
Internal transactions
17. Business owned by two or more people.
Partnership
Creditors
Sole Proprietorship
Pro Forma Financial Statement
18. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Risk Tolerance
Debt Ratio
Unadjusted Trial Balance
Cash Basis Accounting
19. Resources that a company owns or controls that are expected to provide current and future benefits to the business.
Assets
Unadjusted Trial Balance
Risk
Cost Principle
20. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
General Journal
Long Term Investments
Contra Account
Classified Balance Sheet
21. 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
Accrued Revenues
Expanded Accounting Equation
Surplus
T Account
22. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Profit Margin
Unearned Revenue
Cash Basis Accounting
Balance Column Account
23. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Secured Loan
Revenue Recognition Principle
Work Sheet
Accrued Expenses
24. Assets put into the business by the owner.
Full Disclosure Principle
SMART Goal
Owner Investment
Unadjusted Trial Balance
25. Excess of expenses over revenues for a period.
Partnership
Time Period Assumptions
Unclassified Balance Sheets
Net Loss
26. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Materiality Constraint
Posting Reference Column
Limited Liability Corporation
Long Term Liabilities
27. The money left over when income exceeds expenditure.
Ledger
Surplus
Bailout
Operating Cycle
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.
Revenues
NYSE (New York Stock Exchange)
Classified Balance Sheet
Going-concern Assumptions
29. The principle prescribing that revenue is recognized when earned.
Accounting Equation
Limited Liability Corporation
Internal users
Revenue Recognition Principle
30. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Posting Reference Column
Stock
Measurement Principle
Book Value
31. 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
Bonds
NASDAQ
Cost Principle
Posting Reference Column
32. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Current Ratio
Owner Investment
Secured Loan
Posting Reference Column
33. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Present Value
Business Entity Assumption
Current Assets
Risk
34. Uncertainty about expected return.
Securities and Exchange Commission
Risk
Corporations
Recordkeeping
35. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Source Documents
Auditors
Current Assets
Return
36. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Accrued Expenses
NYSE (New York Stock Exchange)
Partnership Agreement
Plant Assets
37. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Closing process
Securities
Double Entry Accounting
Revenue Recognition Principle
38. Business owned by one person that is not organized as a corporation.
Conceptual Framework
Financial Accounting Standards Board
Auditors
Sole Proprietorship
39. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Common Stock
Stockholders
Recordkeeping
Measurement Principle
40. 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
Interim Financial Statements
Conceptual Framework
Preferred Stock
Partnership Agreement
41. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Conceptual Framework
Closing process
Interim Financial Statements
Accounting Equation
42. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Internal users
Matching Principle (or Expense Recognition Principle)
Shareholders
Closing process
43. A legal entity that is seperate from its owners.
Corporations
Trial balance
Time Period Assumptions
Posting
44. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Conceptual Framework
Financial Accounting
Matching Principle (or Expense Recognition Principle)
Owner Withdrawals
45. Individuals or organizations that owe money.
Debtors
Portfolio Income
Common Stock
Statement of Cash Flows
46. 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
Assets
Source Documents
Reversing Entries
47. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Ethics
Contra Account
Cash Basis Accounting
Cost-benefit Constraint
48. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Unclassified Balance Sheets
Equity
General Journal
Recordkeeping
49. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
SEC (Securites and Exchange Commision)
Present Value
Time Period Assumptions
Varaiable Expense
50. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Accounting
Partnership
Chart of Accounts
Closing process