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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. 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
Statement of Owner's Equity
Sarbanes-Oxley Act (SOX)
Full Disclosure Principle
Mergers
2. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Intangible assets
Shareholders
Securities and Exchange Commission
Securities
3. Happenings that both affect an organization's financial position and can be reliably measured.
NYSE (New York Stock Exchange)
Ponzi Scheme
Balance Sheet
Events
4. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Audit
Acquisition
Fixed Expense
Income Statement
5. Equity of a corporation divided into ownership units that usually give dividends. Also called Stock.
Audit
Shares
Double Entry Accounting
External Users
6. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Federal Reserve System
Ethics
Assets
Deficit
7. 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
Partnership
Materiality Constraint
Pro Forma Financial Statement
Expanded Accounting Equation
8. Goals that are specific - measurable - attainable - realistic - and time bound.
Natural Business Years
SMART Goal
Full Disclosure Principle
Statement of Owner's Equity
9. Owner's claim on the assets of a business; equals the residual interest in an entity's assets after deducting liabilities. Also called net assets.
Unearned Revenues
Discretionary Income
Equity
Return
10. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Unadjusted Trial Balance
Post Closing Trial Balance
Balance Sheet
Long Term Liabilities
11. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Contra Account
Time Period Assumptions
Closing Entries
Matching Principle (or Expense Recognition Principle)
12. Owners of a corporation who usually receive dividends. Also called shareholders.
Stockholders
Securities and Exchange Commission
Bookkeeping
Current Assets
13. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Cost Principle
Internal users
External Users
Risk
14. Individuals or organizations that owe money.
Monetary Unit Assumption
Business Entity Assumption
Debtors
Expenses
15. 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.
Securities and Exchange Commission
Liabilities
Interim Financial Statements
Time Period Assumptions
16. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Income Summary
Revenue Recognition Principle
Time Period Assumptions
Materiality Constraint
17. Difference between total debits and total credits (including the beginning balance) for an account.
Reversing Entries
Working Papers
Account Balance
Recordkeeping
18. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
IPO
Annual Financial Statements
Long Term Liabilities
Unearned Revenue
19. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Shareholders
Mergers
Deficit
20. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
CD (Certificate of Deposit)
Accounting Cycle
Depreciation
Full Disclosure Principle
21. Independent group of full-time members responsible for setting accounting rules.
Bookkeeping
Going-concern Assumptions
Financial Accounting Standards Board
Corporations
22. Length of time covered by financial statements; also called reporting period.
Stock
Stockholders
Accounting Period
Compound Journal Entries
23. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Auditors
Net Income
Debt Ratio
Classified Balance Sheet
24. An expense that changes from period to perio - such as food or gasoline costs.
Current Liabilities
Adjusted Trial Balance
Permanent Accounts
Varaiable Expense
25. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Conceptual Framework
Preferred Stock
Financial Accounting
Operating Cycle
26. Accounting system that recognizes revenues when cash is received and records expenses when cash is paid.
Common Stock
Cash Basis Accounting
Current Assets
Source Documents
27. Financial statements covering periods of less than one year; usually based on one- - three- - or six-month periods.
Secured Loan
Conceptual Framework
Interim Financial Statements
Classified Balance Sheet
28. Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Corporations
Audit
Accrual Basis Accounting
Debt Ratio
29. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Risk
Equity
External Transactions
Passive Income
30. 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.
Stock
Unsecured Loan
Owner Withdrawals
Matching Principle
31. The principle prescribing that revenue is recognized when earned.
Ponzi Scheme
Net Income
Revenue Recognition Principle
Balance Sheet
32. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Conceptual Framework
Pro Forma Financial Statement
Long Term Investments
Adjusted Trial Balance
33. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Book Value
Securities
SMART Goal
Matching Principle (or Expense Recognition Principle)
34. 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.
Unadjusted Trial Balance
Intangible assets
Corporation
Expense Recognition Principle
35. Individuals hired to review financial reports and information systems of organizations.
Federal Reserve System
Preferred Stock
Auditors
Depreciation
36. Expenses that remain the same regardless of the circumstances.
Managerial Accounting
Generally Accepted Accounting Principles
Fixed Expense
Book Value
37. Activities within an organization that can affect the accounting equation.
Internal transactions
Unadjusted Trial Balance
Varaiable Expense
SMART Goal
38. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
General Journal
Stock
Unadjusted Trial Balance
Materiality Constraint
39. A type of savings account that offers higher interest rates - with higher minimum deposit levels than a regular savings account.
Work Sheet
Straight-line Depreciation Method
Securities and Exchange Commission
Money Market Account
40. Monies (or sums of money) received from an investment; often in percent form.
Return
Owner Withdrawals
Varaiable Expense
NASDAQ
41. 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).
Deficit
Stock
Posting
Income Summary
42. Spreadsheets used to draft an unadjusted trial balance - adjusting entries - adjusted trial balance - and financial statements.
Common Stock
Work Sheet
External Transactions
Shareholders
43. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
T Account
Owner Withdrawals
Risk Tolerance
Corporations
44. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Compound Journal Entries
Revenues
Securities and Exchange Commission
Expanded Accounting Equation
45. Ratio of a company's net income to its net sales. The percent of income in each dollar of revenue.
Cash Basis Accounting
Income Summary
Corporation
Profit Margin
46. A legal entity that is seperate from its owners.
Current Liabilities
Corporations
Accrual Basis Accounting
International Financial Reporting Standards
47. Record within an accounting system in which increases and decreases are entered and stored in a specific asset - liability - equity - revenue - or expense.
Debtors
Corporation
Account
NYSE (New York Stock Exchange)
48. Analyses and other informal reports prepared by accountants and managers when organizing information for formal reports and financial statements.
Accrual Basis Accounting
Materiality Constraint
Working Papers
Source Documents
49. Individuals or organizations entitled to receive payments
Creditors
Limited Liability Corporation
Internal users
Preferred Stock
50. The combining of two or more comapnies into one larger company.
Adjusted Trial Balance
Mergers
SMART Goal
International Financial Reporting Standards