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Test your basic knowledge |
DSST Principles Of Finance
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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. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Audit
Federal Reserve System
Surplus
Creditors
2. Assets pulled out of the business by the owner.
Ethical Dilemma
Account Balance
Owner Withdrawals
Interim Financial Statements
3. Income from investments - including dividends - interest - or the sale of a property.
Portfolio Income
Account
CD (Certificate of Deposit)
Statement of Owner's Equity
4. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Ethics
Unearned Revenue
Reversing Entries
Owner - Capital
5. Excess of expenses over revenues for a period.
Net Loss
Expense Recognition Principle
Money Market Account
Accounting Equation
6. A tax deferred account that allows individuals to plan for their retirement.
Depreciation
Audit
IRA (Individual Retirement Account)
Annual Financial Statements
7. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Owner Withdrawals
Preferred Stock
Time Period Assumptions
Return on Assets
8. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Sole Proprietorship
Accounting
Posting Reference Column
Trial balance
9. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Posting
Debtors
Cost-benefit Constraint
Cost Principle
10. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Long Term Investments
Closing process
Adjusting Entry
Expanded Accounting Equation
11. 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.
Cost-benefit Constraint
Permanent Accounts
Expense Recognition Principle
Long Term Investments
12. A corporation's basic ownership share.
Expense Recognition Principle
Current Liabilities
Common Stock
Trial balance
13. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Shares
Plant Assets
Posting
Risk
14. The principle prescribing that revenue is recognized when earned.
Return
T Account
Revenue Recognition Principle
Portfolio Income
15. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Profit Margin
Accounting Equation
Unsecured Loan
Compound Journal Entries
16. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Return
Conceptual Framework
Post Closing Trial Balance
Posting
17. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
External Users
Recordkeeping
Permanent Accounts
Money Market Account
18. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Long Term Liabilities
Current Liabilities
Ethical Dilemma
Time Period Assumptions
19. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
IPO
Temporary Accounts
Depreciation
Chart of Accounts
20. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Money Market Account
Statement of Owner's Equity
Post Closing Trial Balance
Corporation
21. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Equity
Trial balance
Posting
Creditors
22. The central bank of the United States - with 12 Federal Reserve branch banks located in major cities throughout the nation. It helps to regulate the US monetary and banking system.
Federal Reserve System
Conceptual Framework
Limited Liability Corporation
Auditors
23. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Conceptual Framework
Double Entry Accounting
Accounting Equation
Going-concern Assumptions
24. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Cost Principle
Source Documents
Book Value
Deficit
25. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Ethics
Fiscal Year
Double Entry Accounting
Sarbanes-Oxley Act (SOX)
26. Tool used to show the effects of transactions and events on individual accounts.
International Financial Reporting Standards
Stock
Accounting Cycle
T Account
27. Gross increase in equity from a company's business activities that earn income.
NASDAQ
Revenues
Discretionary Income
Balance Sheet
28. Goals that are specific - measurable - attainable - realistic - and time bound.
Reversing Entries
Shareholders
SMART Goal
Income Statement
29. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Net Income
Pro Forma Financial Statement
Cost-benefit Constraint
Closing Entries
30. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Liabilities
Net Loss
Profit Margin
Events
31. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Ethical Dilemma
Interim Financial Statements
Financial Accounting
32. Persons using accounting information who are not directly involved in running the organization.
Monetary Unit Assumption
Reversing Entries
External Users
Return
33. Monies (or sums of money) received from an investment; often in percent form.
Sole Propietorship
Temporary Accounts
Return
Accounting Period
34. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Money Market Account
Current Liabilities
Internal users
Expense Recognition Principle
35. Report of changes in equity over a period; adjusted for increases and for decreases.
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36. Area of accounting aimed mainly at serving external users.
Equity
Risk
Cash Basis Accounting
Financial Accounting
37. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Credit
Risk
Return on Assets
Current Ratio
38. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Balance Sheet
Credit
Liabilities
Stock
39. 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.
Internal transactions
Monetary Unit Assumption
Classified Balance Sheet
Bonds
40. A security representing a share of ownership in a company - providing voting rights - and entitling the holer to a share of the company's success through dividends and/or capital appreciation.
Net Loss
Classified Balance Sheet
Common Stock
Secured Loan
41. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Partnership
Current Assets
Source Documents
Account
42. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Unadjusted Trial Balance
Account Balance
Sole Proprietorship
Financial Accounting
43. 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
Preferred Stock
Natural Business Years
Return
Book Value
44. Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Unclassified Balance Sheets
Ledger
Audit
Balance Column Account
45. Balance sheet that broadly groups assets - liabilities - and equity accounts.
NYSE (New York Stock Exchange)
Internal transactions
Unclassified Balance Sheets
Balance Column Account
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 Expense Recognition Principle.
Unclassified Balance Sheets
Matching Principle
Posting
Classified Balance Sheet
47. The twelve month period that ends when a company's sales activities are at their lowest point.
Unearned Revenue
NYSE (New York Stock Exchange)
Book Value
Natural Business Years
48. Principle that assumes transactions and events can be expressed in money units.
Balance Sheet
Reversing Entries
Time Period Assumptions
Monetary Unit Assumption
49. List of accounts used by a company' includes and identification number for each account.
Stockholders
Chart of Accounts
Long Term Liabilities
Reversing Entries
50. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Statement of Cash Flows
Net Loss
Corporation
Managerial Accounting