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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. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Expense Recognition Principle
Cost Principle
International Financial Reporting Standards
Posting Reference Column
2. Principle that assumes transactions and events can be expressed in money units.
Accounting Period
Expense Recognition Principle
Interim Financial Statements
Monetary Unit Assumption
3. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Risk Tolerance
Ponzi Scheme
Current Liabilities
Long Term Liabilities
4. 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
Sarbanes-Oxley Act (SOX)
Profit Margin
Varaiable Expense
Double Entry Accounting
5. A legal entity that is seperate from its owners.
Corporations
Working Papers
Expenses
Accounting Period
6. 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.
Source Documents
Matching Principle
International Financial Reporting Standards
Closing Entries
7. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
CD (Certificate of Deposit)
Common Stock
Corporations
Double Entry Accounting
8. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Compound Journal Entries
Money Market Account
Acquisition
Mergers
9. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Unsecured Loan
Book Value
Matching Principle
Present Value
10. Area of accounting aimed mainly at serving the decision-making needs of internal users.
International Financial Reporting Standards
Reversing Entries
Managerial Accounting
Accounting Equation
11. Accounting information is based on cost with potential subsequent adjustments to fair value.
Measurement Principle
Unadjusted Trial Balance
Current Liabilities
Secured Loan
12. Goals that are specific - measurable - attainable - realistic - and time bound.
SMART Goal
Partnership Agreement
Debt Ratio
Statement of Cash Flows
13. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Income Summary
Recordkeeping
Debit
Sole Propietorship
14. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Debt Ratio
Unclassified Balance Sheets
Net Income
Accrual Basis Accounting
15. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Return on Assets
Posting
Cost-benefit Constraint
Unclassified Balance Sheets
16. Loaning or giving money to a business in orer to save it from bankruptcy.
Secured Loan
Permanent Accounts
Bailout
Operating Cycle
17. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Ethics
Stock
Current Ratio
Owner Investment
18. 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
Ledger
Corporations
Balance Sheet
19. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Straight-line Depreciation Method
Mergers
Shareholders
Accounting Equation
20. 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).
Recordkeeping
Closing Entries
Bailout
Double Entry Accounting
21. A situation in which a person is faced with two convingin yet conflicting alternatives for the solution to a difficult problem.
Closing Entries
Classified Balance Sheet
Long Term Liabilities
Ethical Dilemma
22. A corporation's basic ownership share.
Common Stock
Shareholders
Straight-line Depreciation Method
Current Assets
23. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Posting
Temporary Accounts
Limited Liability Corporation
Ethics
24. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
International Financial Reporting Standards
Financial Accounting
Owner - Capital
Fiscal Year
25. List of accounts used by a company' includes and identification number for each account.
Chart of Accounts
Equity
Return on Assets
International Financial Reporting Standards
26. Independent group of full-time members responsible for setting accounting rules.
Pro Forma Financial Statement
NYSE (New York Stock Exchange)
Financial Accounting Standards Board
Adjusted Trial Balance
27. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Conceptual Framework
Current Assets
Reversing Entries
Present Value
28. An investment scam that uses the assets from new investors to make payments to older investors. Named after Charles Ponzi who used the technique in the early 1900s to defraud thousands of investors.
Partnership
Auditors
Ponzi Scheme
Audit
29. Recorded on the right side; an entry that decreases asset and expense accounts - and increases liability - revenue and most equity accounts. Abbreviated Cr.
Compound Journal Entries
Accrual Basis Accounting
Unsecured Loan
Credit
30. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Return
Ethics
Bonds
Cash Basis Accounting
31. Business owned by a single person.
Sole Propietorship
Secured Loan
Creditors
Closing Entries
32. The combining of two or more comapnies into one larger company.
Unclassified Balance Sheets
Securities and Exchange Commission
Mergers
CD (Certificate of Deposit)
33. Happenings that both affect an organization's financial position and can be reliably measured.
External Transactions
Events
Shareholders
Long Term Investments
34. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Acquisition
Present Value
Unearned Revenues
Fixed Expense
35. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Ponzi Scheme
Accounting Cycle
Annual Financial Statements
Posting Reference Column
36. 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.
Financial Accounting
Liabilities
Classified Balance Sheet
Fixed Expense
37. The part of accounting that involves recording transactions and events either manually or electronically. Also called Recordkeeping.
Ethics
Bookkeeping
Pro Forma Financial Statement
Book Value
38. Owners of a corporation who usually receive dividends. Also called stockholders.
Statement of Owner's Equity
Risk Tolerance
Shareholders
Long Term Liabilities
39. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Trial balance
NYSE (New York Stock Exchange)
Operating Cycle
Matching Principle
40. Revenues earned in a period that both unrecorded and not yet received in cash (or other assets; adjusting entries for recording accrued revenues involve increasing assets and increasing revenues.
Acquisition
Bonds
Accrued Revenues
Accounting Period
41. Individuals hired to review financial reports and information systems of organizations.
Auditors
Varaiable Expense
T Account
Permanent Accounts
42. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Long Term Investments
Posting
Depreciation
Long Term Liabilities
43. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Deficit
Net Loss
Creditors
Present Value
44. Assets pulled out of the business by the owner.
Common Stock
Owner Withdrawals
Income Statement
Debit
45. Income that is available after all of the essential financial commitments have been paid.
Bonds
Matching Principle
Discretionary Income
Interim Financial Statements
46. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Ethical Dilemma
Unclassified Balance Sheets
Statement of Cash Flows
Cost Principle
47. 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.
Expense Recognition Principle
Permanent Accounts
Surplus
Sole Propietorship
48. Activities within an organization that can affect the accounting equation.
Unadjusted Trial Balance
Straight-line Depreciation Method
Internal transactions
Owner Withdrawals
49. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Business Entity Assumption
Contra Account
Going-concern Assumptions
Financial Accounting
50. A contract (usually drawn up by a lawyer) that staes how the partnership will be organized.
Partnership Agreement
Annual Financial Statements
Preferred Stock
Post Closing Trial Balance