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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. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Unsecured Loan
Common Stock
Long Term Investments
Corporation
2. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Liabilities
Interim Financial Statements
Accounting Cycle
Unsecured Loan
3. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Passive Income
Pro Forma Financial Statement
Reversing Entries
Partnership Agreement
4. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Closing process
Unearned Revenues
Trial balance
Statement of Owner's Equity
5. The twelve month period that ends when a company's sales activities are at their lowest point.
Natural Business Years
Preferred Stock
Owner Withdrawals
Sole Proprietorship
6. Individuals or organizations that owe money.
Pro Forma Financial Statement
Liabilities
Current Liabilities
Debtors
7. Monies (or sums of money) received from an investment; often in percent form.
Debt Ratio
Return
IRA (Individual Retirement Account)
Preferred Stock
8. Owner's claim on the assets of a business; equals the residual interest in an entity's assets after deducting liabilities. Also called net assets.
Owner - Capital
Sarbanes-Oxley Act (SOX)
Unadjusted Trial Balance
Equity
9. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Plant Assets
External Users
Credit
Revenue Recognition Principle
10. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Plant Assets
Depreciation
Unadjusted Trial Balance
Debt Ratio
11. Income from investments - including dividends - interest - or the sale of a property.
SEC (Securites and Exchange Commision)
Annual Financial Statements
Generally Accepted Accounting Principles
Portfolio Income
12. Happenings that both affect an organization's financial position and can be reliably measured.
Account Balance
Plant Assets
Partnership
Events
13. Excess of expenses over revenues for a period.
Debt Ratio
Debit
Bookkeeping
Net Loss
14. Debt securities that are issued by a borrower to raise capital . Bonds guarantee payments of the original amount borrowe plus interest and/or repayable on a fixed rate when the bond matures.
Bonds
Reversing Entries
Operating Cycle
Prepaid Expenses
15. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern Assumptions
Annual Financial Statements
Expenses
Risk Tolerance
16. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Current Liabilities
Ledger
Straight-line Depreciation Method
Securities
17. Process of recording transactions in a journal.
Contra Account
Going-concern Assumptions
Debt Ratio
Journalizing
18. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Unclassified Balance Sheets
Unsecured Loan
Risk Tolerance
Time Period Assumptions
19. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Risk
Closing Entries
Secured Loan
Ethical Dilemma
20. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Time Period Assumptions
Monetary Unit Assumption
Account Balance
Liabilities
21. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Risk
NYSE (New York Stock Exchange)
Posting Reference Column
Book Value
22. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Long Term Liabilities
Audit
Going-concern Assumptions
Post Closing Trial Balance
23. 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
Revenues
Sarbanes-Oxley Act (SOX)
Preferred Stock
Net Income
24. Owners of a corporation who usually receive dividends. Also called stockholders.
Balance Column Account
Mergers
Shareholders
Time Period Assumptions
25. Expenses that remain the same regardless of the circumstances.
Revenues
Fixed Expense
Ledger
Return
26. 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.
Net Income
External Transactions
Straight-line Depreciation Method
Accrued Revenues
27. 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.
International Financial Reporting Standards
Chart of Accounts
Adjusting Entry
Preferred Stock
28. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Current Assets
Balance Column Account
Classified Balance Sheet
Prepaid Expenses
29. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Preferred Stock
Work Sheet
Closing process
Income Statement
30. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Going-concern Assumptions
CD (Certificate of Deposit)
Working Papers
Assets
31. Individuals or organizations entitled to receive payments
Interim Financial Statements
Common Stock
Creditors
Ethical Dilemma
32. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Operating Cycle
Unearned Revenues
Double Entry Accounting
Risk Tolerance
33. 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
Matching Principle
Federal Reserve System
Return on Assets
34. Owners of a corporation who usually receive dividends. Also called shareholders.
Portfolio Income
Source Documents
Bailout
Stockholders
35. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Materiality Constraint
Journal
Classified Balance Sheet
36. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Portfolio Income
Owner Withdrawals
Profit Margin
Time Period Assumptions
37. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Book Value
Matching Principle (or Expense Recognition Principle)
Ledger
Long Term Investments
38. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Matching Principle (or Expense Recognition Principle)
Unsecured Loan
Assets
Work Sheet
39. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Securities
External Users
Deficit
Varaiable Expense
40. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Accrued Expenses
Managerial Accounting
Events
Financial Accounting
41. Rules that specify acceptable accounting practices.
Recordkeeping
Debtors
Temporary Accounts
Generally Accepted Accounting Principles
42. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Securities and Exchange Commission
Stockholders
Posting
Temporary Accounts
43. Business owned by two or more people.
Debt Ratio
Partnership
Stockholders
Prepaid Expenses
44. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Financial Accounting
Permanent Accounts
Limited Liability Corporation
Securities and Exchange Commission
45. Statements that show the effect of proposed transactions and events as if they had occurred.
Income Summary
Common Stock
Pro Forma Financial Statement
Internal users
46. 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.
IRA (Individual Retirement Account)
Reversing Entries
Financial Accounting Standards Board
Long Term Liabilities
47. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Acquisition
Equity
International Financial Reporting Standards
Long Term Liabilities
48. Tool used to show the effects of transactions and events on individual accounts.
Owner Withdrawals
T Account
Partnership
Return on Assets
49. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Temporary Accounts
External Transactions
Pro Forma Financial Statement
Adjusted Trial Balance
50. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Depreciation
Secured Loan
External Transactions
Accounting