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DSST Principles Of Finance

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. Gross increase in equity from a company's business activities that earn income.






2. Balance sheet that broadly groups assets - liabilities - and equity accounts.






3. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.






4. 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






5. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.






6. Uncertainty about expected return.






7. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.






8. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.






9. Individuals or organizations that owe money.






10. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.






11. An expense that changes from period to perio - such as food or gasoline costs.






12. Tangible long lived assets used to produce or sell products and services; also called property - plant - and equipment or fixed assets.






13. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.






14. Record containing all accounts (with amounts) for a business.






15. Amount earned after subtracting all expenses necessary for and matched with sales for a period.






16. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.






17. Owners of a corporation who usually receive dividends. Also called shareholders.






18. 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.






19. 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).






20. Independent group of full-time members responsible for setting accounting rules.






21. Unincorporated association of two or more persons to pursue a business for profit as co-owners.






22. Business owned by a single person.






23. 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.






24. Group that identifies preferred accounting practices and encourages global acceptance; issues the International Financial Reporting Standards.






25. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.






26. A corporation's basic ownership share.






27. 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






28. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.






29. Income from investments - including dividends - interest - or the sale of a property.






30. Rules that specify acceptable accounting practices.






31. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.






32. 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.






33. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)






34. Report of changes in equity over a period; adjusted for increases and for decreases.

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35. 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.






36. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.






37. The money left over when income exceeds expenditure.






38. Individuals or organizations entitled to receive payments






39. Assets pulled out of the business by the owner.






40. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.






41. Individuals hired to review financial reports and information systems of organizations.






42. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.






43. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.






44. The twelve month period that ends when a company's sales activities are at their lowest point.






45. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.






46. 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.






47. 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.






48. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.






49. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.






50. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.