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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. 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).
Plant Assets
Full Disclosure Principle
Income Summary
Debt Ratio
2. 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.
Annual Financial Statements
Compound Journal Entries
Expense Recognition Principle
Ponzi Scheme
3. Account linked with another account and having an opposite normal balance. Reported as a subtraction from the other account's normal balance.
Assets
Ponzi Scheme
Conceptual Framework
Contra Account
4. Process of recording transactions in a journal.
Journalizing
External Users
International Financial Reporting Standards
Sarbanes-Oxley Act (SOX)
5. 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
Expanded Accounting Equation
Accounting Period
Posting Reference Column
Accrual Basis Accounting
6. Loaning or giving money to a business in orer to save it from bankruptcy.
Bailout
Matching Principle
Chart of Accounts
Posting Reference Column
7. The combining of two or more comapnies into one larger company.
Accounting
Mergers
Accrued Revenues
Adjusting Entry
8. 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.
Income Statement
Intangible assets
NASDAQ
Interim Financial Statements
9. Record of money deposited in a financeial instution for a state time perio at a fixe interest rate.
Accounting Equation
CD (Certificate of Deposit)
Journal
Unsecured Loan
10. Individuals or organizations entitled to receive payments
Long Term Investments
SEC (Securites and Exchange Commision)
Accrued Revenues
Creditors
11. A tax deferred account that allows individuals to plan for their retirement.
Net Loss
International Financial Reporting Standards
IRA (Individual Retirement Account)
Plant Assets
12. 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.
Federal Reserve System
Return
Matching Principle
Expense Recognition Principle
13. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Journal
Owner Investment
Discretionary Income
Accrual Basis Accounting
14. Persons using accounting information who are not directly involved in running the organization.
External Users
Credit
Account Balance
Materiality Constraint
15. Principle that assumes transactions and events can be expressed in money units.
Corporations
Monetary Unit Assumption
Passive Income
IRA (Individual Retirement Account)
16. 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.
Accrued Revenues
Time Period Assumptions
Reversing Entries
Audit
17. 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.
Materiality Constraint
Generally Accepted Accounting Principles
Common Stock
Revenue Recognition Principle
18. 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.
SMART Goal
International Financial Reporting Standards
Accrued Revenues
Expenses
19. All purpose journal for recording the debits and credits of transactions and events.
External Users
Annual Financial Statements
General Journal
Surplus
20. A federal agency that is responsible for regulating the securities industry an enforcing federal securites laws.
Balance Sheet
Closing Entries
SEC (Securites and Exchange Commision)
Plant Assets
21. 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
Acquisition
Accounting Equation
Sarbanes-Oxley Act (SOX)
Credit
22. Process of transferring journal entry information to the ledger; computerized systems automate this process.
Managerial Accounting
Money Market Account
Account
Posting
23. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Unsecured Loan
Interim Financial Statements
Sole Propietorship
Discretionary Income
24. 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.
Classified Balance Sheet
NYSE (New York Stock Exchange)
Balance Sheet
General Journal
25. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Debt Ratio
Statement of Cash Flows
Internal users
Corporations
26. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Long Term Liabilities
Securities
Net Income
Partnership
27. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Accounting Equation
Current Assets
Depreciation
Money Market Account
28. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Securities and Exchange Commission
Internal transactions
Working Papers
Unclassified Balance Sheets
29. Expenses that remain the same regardless of the circumstances.
Net Loss
Fixed Expense
Corporations
Return
30. Consecutive 12-month (or 52 week) period chosen as the organization's annual accounting period.
Fiscal Year
Corporation
Long Term Investments
Accounting Period
31. An acronym for the National Association of Securities Dealers Automated Quotations. NASDAQ was founded in 1970 and is the largest electronic stock exchange in the United States. Unlike the NYSE - it has no physical location - existing entirely on cyb
Matching Principle
NASDAQ
Reversing Entries
Time Period Assumptions
32. Financial statements covering one-year period; often based on a calendar year - but any consecutive 12-month (or 52 week) period is acceptable.
Shareholders
Accounting Cycle
Journal
Annual Financial Statements
33. Items paid for in advance of receiving their benefits. Classified as assets.
Profit Margin
Closing process
Owner Withdrawals
Prepaid Expenses
34. Cash and other assets expected to be sold - collected - or used within one year or the company's operating cycle - whichever is longer.
Current Assets
Closing Entries
General Journal
Materiality Constraint
35. Balance sheet that broadly groups assets - liabilities - and equity accounts.
Reversing Entries
Going-concern Assumptions
Unclassified Balance Sheets
Prepaid Expenses
36. Individuals hired to review financial reports and information systems of organizations.
Auditors
Compound Journal Entries
Securities and Exchange Commission
Accrual Basis Accounting
37. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Matching Principle
Ethical Dilemma
Recordkeeping
Fiscal Year
38. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Annual Financial Statements
Owner - Capital
Matching Principle
Time Period Assumptions
39. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting Reference Column
Varaiable Expense
Accrued Expenses
Accounting Cycle
40. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Natural Business Years
Owner Withdrawals
Trial balance
Work Sheet
41. 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
NASDAQ
International Financial Reporting Standards
Secured Loan
42. Area of accounting aimed mainly at serving external users.
Conceptual Framework
Financial Accounting
Owner Withdrawals
Income Summary
43. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Matching Principle (or Expense Recognition Principle)
Income Statement
Prepaid Expenses
Shareholders
44. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Post Closing Trial Balance
SEC (Securites and Exchange Commision)
Limited Liability Corporation
Equity
45. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Reversing Entries
Depreciation
Ethics
Sole Propietorship
46. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
Accrual Basis Accounting
Journal
Securities
Common Stock
47. 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.
Bonds
Long Term Investments
Owner - Capital
Cost Principle
48. A legal entity that is seperate from its owners.
Corporations
Current Assets
Discretionary Income
Debit
49. 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).
Events
Plant Assets
Unclassified Balance Sheets
Closing Entries
50. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Expense Recognition Principle
Straight-line Depreciation Method
Owner - Capital
Chart of Accounts