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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. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Time Period Assumptions
Risk
Limited Liability Corporation
Equity
2. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Partnership Agreement
Long Term Liabilities
Cost Principle
Passive Income
3. Process of recording transactions in a journal.
Operating Cycle
IRA (Individual Retirement Account)
Balance Column Account
Journalizing
4. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Statement of Owner's Equity
Temporary Accounts
Interim Financial Statements
Auditors
5. Journal entries that affect at least three accounts.
Ethical Dilemma
Accrued Revenues
Depreciation
Compound Journal Entries
6. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership
Debt Ratio
Corporation
Ponzi Scheme
7. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Contra Account
Cost-benefit Constraint
Account Balance
Managerial Accounting
8. An expense that changes from period to perio - such as food or gasoline costs.
Varaiable Expense
Revenue Recognition Principle
Posting Reference Column
Limited Liability Corporation
9. A written framework to guide the development - preparation - and interpretation of financial accounting information.
International Accounting Standards Board
Expense Recognition Principle
Conceptual Framework
Current Ratio
10. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Working Papers
Double Entry Accounting
Current Assets
Cash Basis Accounting
11. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Debit
Stock
SEC (Securites and Exchange Commision)
Journal
12. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Generally Accepted Accounting Principles
Securities and Exchange Commission
Partnership
Profit Margin
13. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Pro Forma Financial Statement
Measurement Principle
SEC (Securites and Exchange Commision)
Account
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
Accrual Basis Accounting
Audit
Surplus
15. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Events
Creditors
Accounting Cycle
Ponzi Scheme
16. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Ponzi Scheme
Preferred Stock
Classified Balance Sheet
Equity
17. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Cash Basis Accounting
Corporation
Working Papers
Net Income
18. 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
Net Income
Bailout
Going-concern Assumptions
19. 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
Pro Forma Financial Statement
NASDAQ
SEC (Securites and Exchange Commision)
Risk
20. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Accrual Basis Accounting
Closing process
Straight-line Depreciation Method
Monetary Unit Assumption
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
Expanded Accounting Equation
Credit
Accounting Period
Income Summary
22. The money left over when income exceeds expenditure.
Present Value
Measurement Principle
Closing process
Surplus
23. Report of changes in equity over a period; adjusted for increases and for decreases.
24. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Preferred Stock
Creditors
Contra Account
Limited Liability Corporation
25. Assets pulled out of the business by the owner.
Expenses
International Accounting Standards Board
Ethics
Owner Withdrawals
26. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Sole Propietorship
Cash Basis Accounting
Shares
Passive Income
27. A tax deferred account that allows individuals to plan for their retirement.
Unearned Revenues
Time Period Assumptions
Cost-benefit Constraint
IRA (Individual Retirement Account)
28. Entries recorded at the end of each accounting period to transfer end of period balances in revenue - gain - expense - loss - and withdrawal (dividend for a corporation) accounts to the capital account (to retain earnings for a corporation).
Closing Entries
Bonds
External Users
Credit
29. 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.
Intangible assets
Assets
Federal Reserve System
Current Assets
30. Persons using accounting information who are directly involved in managing the organization.
Sarbanes-Oxley Act (SOX)
Mergers
Internal users
Bookkeeping
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 Expense Recognition Principle.
International Financial Reporting Standards
Matching Principle
Pro Forma Financial Statement
SEC (Securites and Exchange Commision)
32. Business owned by a single person.
Intangible assets
Closing Entries
Interim Financial Statements
Sole Propietorship
33. Equity of a corporation divided into ownership units that usually give dividends. Also called Shares.
Stock
Natural Business Years
Internal users
Net Income
34. 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.
Chart of Accounts
Current Ratio
Financial Accounting
Common Stock
35. 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
CD (Certificate of Deposit)
Classified Balance Sheet
Sole Propietorship
36. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Profit Margin
Stockholders
Double Entry Accounting
Return
37. Goals that are specific - measurable - attainable - realistic - and time bound.
Ethics
SMART Goal
Conceptual Framework
Journalizing
38. 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.
Varaiable Expense
Net Income
International Financial Reporting Standards
Journalizing
39. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Straight-line Depreciation Method
Long Term Investments
Ethics
IPO
40. Rules that specify acceptable accounting practices.
Cash Basis Accounting
Generally Accepted Accounting Principles
Accounting
Owner Withdrawals
41. All purpose journal for recording the debits and credits of transactions and events.
General Journal
Natural Business Years
Sarbanes-Oxley Act (SOX)
Long Term Liabilities
42. 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.
Owner - Capital
Corporations
General Journal
Common Stock
43. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Money Market Account
Conceptual Framework
Debit
Balance Sheet
44. 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
Assets
Operating Cycle
Partnership
45. Information and measurement system that identifies - records - and communicates relevant information about a company's business activities.
Secured Loan
Accounting
Chart of Accounts
Statement of Owner's Equity
46. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
General Journal
Operating Cycle
Balance Sheet
Securities and Exchange Commission
47. Length of time covered by financial statements; also called reporting period.
Monetary Unit Assumption
Sole Proprietorship
Risk Tolerance
Accounting Period
48. Items paid for in advance of receiving their benefits. Classified as assets.
Common Stock
Risk
Revenue Recognition Principle
Prepaid Expenses
49. Business owned by two or more people.
Corporations
Adjusting Entry
Balance Column Account
Partnership
50. Create the Public Company Accounting Oversight Board - regulates analyst conflicts - imposes corporate governance requirements - enhances accounting and control disclosures - impacts insider transactions and executive loans - establishes new types of
Monetary Unit Assumption
Permanent Accounts
Sarbanes-Oxley Act (SOX)
Fiscal Year