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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. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Limited Liability Corporation
Accrued Expenses
Revenue Recognition Principle
Intangible assets
2. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Accounting Period
Fiscal Year
Stock
Assets
3. Individuals or organizations entitled to receive payments
Creditors
Unearned Revenues
Expense Recognition Principle
Managerial Accounting
4. 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.
CD (Certificate of Deposit)
T Account
Stock
Federal Reserve System
5. 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.
Sole Proprietorship
NYSE (New York Stock Exchange)
Matching Principle
Events
6. Difference between total debits and total credits (including the beginning balance) for an account.
Financial Accounting
Limited Liability Corporation
Measurement Principle
Account Balance
7. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Expanded Accounting Equation
Current Assets
Cost-benefit Constraint
Return on Assets
8. Length of time covered by financial statements; also called reporting period.
Accounting Period
Pro Forma Financial Statement
Prepaid Expenses
Accounting Equation
9. The twelve month period that ends when a company's sales activities are at their lowest point.
Compound Journal Entries
Unearned Revenues
Account Balance
Natural Business Years
10. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.
Time Period Assumptions
Plant Assets
Book Value
Interim Financial Statements
11. Statements that show the effect of proposed transactions and events as if they had occurred.
Pro Forma Financial Statement
Classified Balance Sheet
Shareholders
Income Statement
12. Expenses that remain the same regardless of the circumstances.
Unsecured Loan
Debt Ratio
Fixed Expense
T Account
13. A loan that is backed by collateral such as cars - houses - or other assets.
Shareholders
Double Entry Accounting
External Users
Secured Loan
14. Uncertainty about expected return.
Portfolio Income
Income Summary
Risk
Owner - Capital
15. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Interim Financial Statements
Business Entity Assumption
Operating Cycle
Sole Proprietorship
16. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Account
Going-concern Assumptions
Deficit
Pro Forma Financial Statement
17. The principle prescribing that revenue is recognized when earned.
Balance Column Account
Auditors
Revenue Recognition Principle
Creditors
18. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Unclassified Balance Sheets
Acquisition
Reversing Entries
Accrual Basis Accounting
19. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Credit
Straight-line Depreciation Method
Passive Income
Work Sheet
20. Items paid for in advance of receiving their benefits. Classified as assets.
Debt Ratio
Prepaid Expenses
Full Disclosure Principle
Internal transactions
21. Business owned by one person that is not organized as a corporation.
Acquisition
Account Balance
Stock
Sole Proprietorship
22. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Current Ratio
Time Period Assumptions
Account Balance
Prepaid Expenses
23. List of accounts used by a company' includes and identification number for each account.
Income Statement
Unearned Revenue
Liabilities
Chart of Accounts
24. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Present Value
Preferred Stock
Current Liabilities
Revenue Recognition Principle
25. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Permanent Accounts
Common Stock
Preferred Stock
Posting
26. 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.
Revenue Recognition Principle
Going-concern Assumptions
Ethical Dilemma
Owner - Capital
27. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Owner - Capital
Financial Accounting Standards Board
Accounting Cycle
Partnership Agreement
28. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Shares
Bookkeeping
Expanded Accounting Equation
Account
29. 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).
Journalizing
Ethical Dilemma
Closing Entries
Corporations
30. Business owned by two or more people.
Internal transactions
Partnership
Current Ratio
Cost Principle
31. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Credit
Trial balance
Cost-benefit Constraint
Closing process
32. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Profit Margin
Securities and Exchange Commission
Trial balance
Source Documents
33. A tax deferred account that allows individuals to plan for their retirement.
Unadjusted Trial Balance
Going-concern Assumptions
IRA (Individual Retirement Account)
Owner Investment
34. Tool used to show the effects of transactions and events on individual accounts.
Compound Journal Entries
Common Stock
T Account
Time Period Assumptions
35. 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.
Time Period Assumptions
Creditors
Generally Accepted Accounting Principles
International Financial Reporting Standards
36. Business owned by a single person.
Preferred Stock
Sole Propietorship
Operating Cycle
NASDAQ
37. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Return
Operating Cycle
Conceptual Framework
Unearned Revenues
38. The combining of two or more comapnies into one larger company.
Bonds
Chart of Accounts
Plant Assets
Mergers
39. 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.
Business Entity Assumption
Financial Accounting Standards Board
SEC (Securites and Exchange Commision)
Liabilities
40. Process of recording transactions in a journal.
Discretionary Income
Preferred Stock
Journalizing
Going-concern Assumptions
41. The first time a company sells shares of its stock to the public.
Discretionary Income
Account Balance
General Journal
IPO
42. 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
Deficit
Expenses
Events
43. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Sole Propietorship
Bonds
Ethical Dilemma
Revenue Recognition Principle
44. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Statement of Cash Flows
Unsecured Loan
Posting
Prepaid Expenses
45. All purpose journal for recording the debits and credits of transactions and events.
Adjusting Entry
Current Assets
NYSE (New York Stock Exchange)
General Journal
46. Persons using accounting information who are not directly involved in running the organization.
Sarbanes-Oxley Act (SOX)
External Users
Matching Principle
Deficit
47. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.
International Accounting Standards Board
Securities
Income Summary
Income Statement
48. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Recordkeeping
Annual Financial Statements
Ethics
Owner - Capital
49. 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.
Liabilities
Accrued Expenses
NYSE (New York Stock Exchange)
CD (Certificate of Deposit)
50. 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
Permanent Accounts
Long Term Liabilities
Passive Income