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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.
Managerial Accounting
Cost Principle
Sarbanes-Oxley Act (SOX)
Risk Tolerance
2. Rules that specify acceptable accounting practices.
Unearned Revenue
Posting Reference Column
Generally Accepted Accounting Principles
Account Balance
3. Individuals or organizations that owe money.
Adjusted Trial Balance
Debtors
Matching Principle
Account
4. Income from investments - including dividends - interest - or the sale of a property.
Corporations
Statement of Owner's Equity
Portfolio Income
Business Entity Assumption
5. Amount earned after subtracting all expenses necessary for and matched with sales for a period.
Going-concern Assumptions
Net Income
T Account
Matching Principle
6. A meausre if an investor's ability to cope with fluctations in the value of their portfolio.
Equity
Risk Tolerance
Long Term Liabilities
External Users
7. Accounts used to record revenues - expenses - and withdrawals (dividends for a corporation). They are closed at the end of each period.
Temporary Accounts
Surplus
Owner - Capital
Unearned Revenues
8. Statements that show the effect of proposed transactions and events as if they had occurred.
Sole Proprietorship
Compound Journal Entries
Prepaid Expenses
Pro Forma Financial Statement
9. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Limited Liability Corporation
Chart of Accounts
Securities
Unsecured Loan
10. 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
Posting Reference Column
Unclassified Balance Sheets
Adjusted Trial Balance
Sarbanes-Oxley Act (SOX)
11. A security representing partial ownership of the company. It gives the holer priority to dividends over common stock investors. Capital stock that provides a specific dividend - which is paid before any dividends are pai to common stock holders - an
Preferred Stock
Expense Recognition Principle
Corporations
Partnership Agreement
12. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Statement of Owner's Equity
Acquisition
Unsecured Loan
Going-concern Assumptions
13. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Statement of Owner's Equity
Limited Liability Corporation
Depreciation
Journal
14. The first time a company sells shares of its stock to the public.
IPO
Going-concern Assumptions
Accounting Cycle
General Journal
15. Record containing all accounts (with amounts) for a business.
Net Income
Ledger
Stockholders
Risk
16. An expense that changes from period to perio - such as food or gasoline costs.
CD (Certificate of Deposit)
Unclassified Balance Sheets
Going-concern Assumptions
Varaiable Expense
17. Individuals hired to review financial reports and information systems of organizations.
Auditors
Federal Reserve System
Time Period Assumptions
Internal transactions
18. Owners of a corporation who usually receive dividends. Also called shareholders.
Unadjusted Trial Balance
Stockholders
Corporations
Straight-line Depreciation Method
19. A corporation's basic ownership share.
Unearned Revenues
Common Stock
Sole Proprietorship
Present Value
20. Earning received from rental property or other business activity where the individual is not actively involved (such as royalties from publishing a book)
Annual Financial Statements
Creditors
Long Term Liabilities
Passive Income
21. Happenings that both affect an organization's financial position and can be reliably measured.
Varaiable Expense
Events
Liabilities
Going-concern Assumptions
22. Accounting information is based on cost with potential subsequent adjustments to fair value.
Accounting
Posting
Debt Ratio
Measurement Principle
23. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - or years.
Ledger
Federal Reserve System
Portfolio Income
Time Period Assumptions
24. 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
Full Disclosure Principle
Mergers
Revenues
25. Recurring steps performed each accounting period - starting with analyzing transactions and continuing through the post closing trial balance (or reversing entries).
Debit
Accounting Cycle
Cost Principle
Limited Liability Corporation
26. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Assets
Prepaid Expenses
Long Term Investments
Debtors
27. Items paid for in advance of receiving their benefits. Classified as assets.
Compound Journal Entries
Prepaid Expenses
Partnership
Unearned Revenue
28. List of accounts and balances prepared after period-end adjustments are recorded and posted.
Going-concern Assumptions
Current Assets
Adjusted Trial Balance
Liabilities
29. Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses and increasing liabilities.
Interim Financial Statements
Current Assets
Annual Financial Statements
Accrued Expenses
30. 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.
Net Loss
Securities
General Journal
Equity
31. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Securities and Exchange Commission
Owner Withdrawals
Time Period Assumptions
32. The twelve month period that ends when a company's sales activities are at their lowest point.
Pro Forma Financial Statement
Natural Business Years
Monetary Unit Assumption
Matching Principle
33. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Annual Financial Statements
Statement of Cash Flows
Plant Assets
Liabilities
34. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Limited Liability Corporation
Intangible assets
Working Papers
Natural Business Years
35. Goals that are specific - measurable - attainable - realistic - and time bound.
SMART Goal
CD (Certificate of Deposit)
Owner - Capital
Present Value
36. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Balance Sheet
Current Assets
Permanent Accounts
Journalizing
37. Optional entries recorded at the beginning of a period that prepare the accounts for the usual journal entries as if adjusting entries had not occurred in the prior period.
Posting
Reversing Entries
Monetary Unit Assumption
Accounting Equation
38. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Business Entity Assumption
Debt Ratio
Going-concern Assumptions
Long Term Liabilities
39. Equality involving a company's assets - liabilities - and equity; Assets = Liabilities + Equity
Accounting Equation
Balance Column Account
Fiscal Year
Current Liabilities
40. 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).
Generally Accepted Accounting Principles
Time Period Assumptions
Work Sheet
Closing Entries
41. A loan that is backed by collateral such as cars - houses - or other assets.
Going-concern Assumptions
Secured Loan
Stock
Income Summary
42. 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).
Net Income
Financial Accounting
Income Summary
Straight-line Depreciation Method
43. 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.
Matching Principle
Events
Intangible assets
International Accounting Standards Board
44. The principle prescribing that revenue is recognized when earned.
Measurement Principle
Long Term Investments
Revenue Recognition Principle
NYSE (New York Stock Exchange)
45. Activities within an organization that can affect the accounting equation.
Revenues
Journal
Corporation
Internal transactions
46. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Unsecured Loan
Expenses
Statement of Owner's Equity
Journal
47. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern Assumptions
Accounting Equation
Stockholders
Corporation
48. 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
Varaiable Expense
Accounting Cycle
Bailout
49. The money left over when income exceeds expenditure.
Surplus
Partnership
Securities
Corporations
50. Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Unclassified Balance Sheets
Partnership
Corporation
Pro Forma Financial Statement