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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. All purpose journal for recording the debits and credits of transactions and events.
Ponzi Scheme
External Users
Common Stock
General Journal
2. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Double Entry Accounting
Unearned Revenue
Portfolio Income
Book Value
3. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Journal
External Transactions
Profit Margin
Depreciation
4. Excess of expenses over revenues for a period.
Source Documents
Credit
Trial balance
Net Loss
5. Process of recording transactions in a journal.
T Account
Accounting Cycle
Journalizing
Ethical Dilemma
6. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Deficit
Common Stock
Full Disclosure Principle
Cost-benefit Constraint
7. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Net Income
Journal
Cash Basis Accounting
Owner - Capital
8. Accounts that reflect activities related to one or more future periods; balance sheet accounts whose balances are not closed. Also called real accounts.
Internal users
Bailout
Accounting Period
Permanent Accounts
9. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Straight-line Depreciation Method
Sole Propietorship
Statement of Cash Flows
Revenues
10. Record containing all accounts (with amounts) for a business.
Business Entity Assumption
Ledger
Current Assets
Discretionary Income
11. The twelve month period that ends when a company's sales activities are at their lowest point.
Deficit
Discretionary Income
Auditors
Natural Business Years
12. 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).
Adjusted Trial Balance
Account
Closing Entries
Bonds
13. List of accounts used by a company' includes and identification number for each account.
IRA (Individual Retirement Account)
Securities
Bookkeeping
Chart of Accounts
14. Financial statement that subtracts expenses from revenues to yield a net income or loss over a specified period of time; also includes any gains or losses.
Statement of Cash Flows
Bonds
Income Statement
CD (Certificate of Deposit)
15. Individuals or organizations that owe money.
Bookkeeping
Debtors
Present Value
Recordkeeping
16. A corporation's basic ownership share.
Working Papers
Debtors
Common Stock
Time Period Assumptions
17. 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.
Fiscal Year
Bonds
External Transactions
IPO
18. 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
Acquisition
Ledger
Securities and Exchange Commission
Expanded Accounting Equation
19. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Current Liabilities
Revenue Recognition Principle
Internal transactions
Operating Cycle
20. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Statement of Cash Flows
Intangible assets
Return on Assets
Going-concern Assumptions
21. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Accounting Cycle
Adjusted Trial Balance
Bonds
Accrual Basis Accounting
22. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Plant Assets
Accrued Expenses
Book Value
IRA (Individual Retirement Account)
23. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Corporation
IPO
Temporary Accounts
Closing Entries
24. Business owned by a single person.
Sarbanes-Oxley Act (SOX)
Long Term Liabilities
Sole Propietorship
Trial balance
25. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Fiscal Year
Income Statement
External Users
Acquisition
26. The value of a future cash steam discounted at the appropriate market interest rate.
Sole Propietorship
Present Value
Corporation
Sarbanes-Oxley Act (SOX)
27. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Unearned Revenue
T Account
Money Market Account
Interim Financial Statements
28. 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.
Debit
Compound Journal Entries
Return
Owner - Capital
29. Rules that specify acceptable accounting practices.
Matching Principle
Generally Accepted Accounting Principles
Partnership
Sarbanes-Oxley Act (SOX)
30. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Partnership Agreement
Accrued Revenues
Corporation
Fixed Expense
31. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Ethical Dilemma
Classified Balance Sheet
Debt Ratio
Securities
32. Length of time covered by financial statements; also called reporting period.
Accounting Period
Events
Shareholders
Internal users
33. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Generally Accepted Accounting Principles
Expense Recognition Principle
Double Entry Accounting
Posting
34. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Profit Margin
Risk
Account Balance
Intangible assets
35. Area of accounting aimed mainly at serving the decision-making needs of internal users.
Credit
Managerial Accounting
Accrual Basis Accounting
Matching Principle
36. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Sarbanes-Oxley Act (SOX)
Profit Margin
Audit
Materiality Constraint
37. Exchanges of economic value between one entity and another entity.
Bonds
Plant Assets
External Transactions
Owner - Capital
38. Journal entries that affect at least three accounts.
Compound Journal Entries
Generally Accepted Accounting Principles
Limited Liability Corporation
Discretionary Income
39. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership
Closing Entries
Preferred Stock
Accrual Basis Accounting
40. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Acquisition
Ethical Dilemma
Unearned Revenue
Liabilities
41. Expenses that remain the same regardless of the circumstances.
Fixed Expense
Long Term Investments
Unearned Revenue
Debtors
42. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Expanded Accounting Equation
Ethics
Debit
43. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Annual Financial Statements
Sarbanes-Oxley Act (SOX)
CD (Certificate of Deposit)
Expense Recognition Principle
44. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Unadjusted Trial Balance
Working Papers
Money Market Account
Return on Assets
45. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Post Closing Trial Balance
Statement of Owner's Equity
Passive Income
Return
46. Outflows or using up of assets as part of operations of business to generate sales.
Current Liabilities
Auditors
IRA (Individual Retirement Account)
Expenses
47. Persons using accounting information who are not directly involved in running the organization.
Prepaid Expenses
Accrued Revenues
Limited Liability Corporation
External Users
48. Happenings that both affect an organization's financial position and can be reliably measured.
Events
Present Value
Federal Reserve System
Sole Propietorship
49. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Partnership Agreement
Recordkeeping
T Account
Debit
50. Analysis and report of an organization's accounting system - its records - and its reports using various tests.
Closing process
Unsecured Loan
Audit
Varaiable Expense