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Test your basic knowledge |
DSST Principles Of Finance
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Subjects
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dsst
,
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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study here
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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. The combining of two or more comapnies into one larger company.
Mergers
Going-concern Assumptions
Credit
T Account
2. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Conceptual Framework
Securities and Exchange Commission
Accrual Basis Accounting
Straight-line Depreciation Method
3. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
T Account
Accrual Basis Accounting
NYSE (New York Stock Exchange)
Net Income
4. Ratio reflecting operating efficiency; defined as net income divided by average total assets for that period.
Return on Assets
SMART Goal
Compound Journal Entries
Cash Basis Accounting
5. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Full Disclosure Principle
Partnership
Classified Balance Sheet
Revenue Recognition Principle
6. Tool used to show the effects of transactions and events on individual accounts.
T Account
Owner Withdrawals
International Financial Reporting Standards
Operating Cycle
7. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Debt Ratio
Recordkeeping
Straight-line Depreciation Method
Revenues
8. 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.
International Financial Reporting Standards
Long Term Liabilities
Internal transactions
Journalizing
9. The first time a company sells shares of its stock to the public.
Recordkeeping
Work Sheet
IPO
Stockholders
10. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Plant Assets
Income Statement
Stock
Partnership Agreement
11. 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
Bookkeeping
Money Market Account
Double Entry Accounting
12. 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
Stock
Passive Income
Statement of Cash Flows
13. Area of accounting aimed mainly at serving external users.
Financial Accounting
Credit
Bonds
Full Disclosure Principle
14. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
Generally Accepted Accounting Principles
Ledger
T Account
Current Liabilities
15. Report of changes in equity over a period; adjusted for increases and for decreases.
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16. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Net Loss
Current Assets
Balance Sheet
Varaiable Expense
17. The money left over when income exceeds expenditure.
Surplus
Federal Reserve System
Conceptual Framework
Contra Account
18. A loan that is backed by collateral such as cars - houses - or other assets.
IPO
General Journal
Secured Loan
NYSE (New York Stock Exchange)
19. Principle that assumes transactions and events can be expressed in money units.
Monetary Unit Assumption
Trial balance
Posting Reference Column
Equity
20. All purpose journal for recording the debits and credits of transactions and events.
Partnership
Surplus
Accrued Expenses
General Journal
21. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
Recordkeeping
General Journal
Expense Recognition Principle
22. Accounting information is based on cost with potential subsequent adjustments to fair value.
Straight-line Depreciation Method
Net Income
Measurement Principle
Passive Income
23. 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
Owner Investment
Sarbanes-Oxley Act (SOX)
Pro Forma Financial Statement
Ponzi Scheme
24. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Ledger
Portfolio Income
Matching Principle (or Expense Recognition Principle)
Double Entry Accounting
25. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Net Income
Monetary Unit Assumption
Interim Financial Statements
Unadjusted Trial Balance
26. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Interim Financial Statements
Audit
Time Period Assumptions
Equity
27. The twelve month period that ends when a company's sales activities are at their lowest point.
Natural Business Years
Unadjusted Trial Balance
Prepaid Expenses
Bonds
28. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
Materiality Constraint
Money Market Account
Ethical Dilemma
Partnership
29. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Acquisition
Adjusting Entry
Securities and Exchange Commission
Bonds
30. Gross increase in equity from a company's business activities that earn income.
Owner - Capital
Revenues
Unclassified Balance Sheets
Monetary Unit Assumption
31. Income from investments - including dividends - interest - or the sale of a property.
Debtors
Working Papers
Portfolio Income
Measurement Principle
32. 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.
Monetary Unit Assumption
Interim Financial Statements
Bonds
Portfolio Income
33. Monies (or sums of money) received from an investment; often in percent form.
Balance Column Account
Return
Debt Ratio
Trial balance
34. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Work Sheet
Managerial Accounting
External Users
Full Disclosure Principle
35. Temporary account used only in the closing process to which the balances of revenue and expense accounts (including any gains or losses) are transferred. Its balance is transferred to the capital account (or retained earnings for a corporation).
Reversing Entries
Income Summary
Adjusted Trial Balance
Present Value
36. Length of time covered by financial statements; also called reporting period.
Debt Ratio
Accounting Period
Net Income
Surplus
37. 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.
Income Statement
Equity
Sarbanes-Oxley Act (SOX)
Matching Principle
38. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Current Assets
Conceptual Framework
Double Entry Accounting
Accrual Basis Accounting
39. Goals that are specific - measurable - attainable - realistic - and time bound.
Return on Assets
Temporary Accounts
SMART Goal
Sarbanes-Oxley Act (SOX)
40. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Accrual Basis Accounting
International Financial Reporting Standards
Time Period Assumptions
Return
41. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Posting
Ethics
Post Closing Trial Balance
Audit
42. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Unsecured Loan
Contra Account
Pro Forma Financial Statement
Risk Tolerance
43. Owners of a corporation who usually receive dividends. Also called shareholders.
Business Entity Assumption
Matching Principle
Stockholders
Materiality Constraint
44. 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).
Credit
Closing Entries
Corporations
Risk Tolerance
45. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Owner Investment
Expenses
CD (Certificate of Deposit)
Accounting Equation
46. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Owner - Capital
Post Closing Trial Balance
Cash Basis Accounting
Ethics
47. Individuals or organizations that owe money.
CD (Certificate of Deposit)
Ponzi Scheme
Mergers
Debtors
48. A tax deferred account that allows individuals to plan for their retirement.
Passive Income
Post Closing Trial Balance
External Users
IRA (Individual Retirement Account)
49. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Working Papers
Debit
Adjusted Trial Balance
Partnership
50. A legal entity that is seperate from its owners.
Cash Basis Accounting
Accrued Revenues
Corporations
Stockholders
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