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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. The money left over when income exceeds expenditure.
Classified Balance Sheet
Surplus
Long Term Liabilities
Ethical Dilemma
2. A loan that is backed by collateral such as cars - houses - or other assets.
Chart of Accounts
Mergers
Secured Loan
Surplus
3. Individuals or organizations entitled to receive payments
Time Period Assumptions
Creditors
Account Balance
Unsecured Loan
4. A financial shortage that occurs when liabilities exceed assets or when cash inflows are less than cash outflows.
Common Stock
Accounting Equation
Deficit
Generally Accepted Accounting Principles
5. Business owned by two or more people.
Partnership
Permanent Accounts
Journal
Income Summary
6. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Unearned Revenues
Annual Financial Statements
Accounting Cycle
Financial Accounting Standards Board
7. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Matching Principle
Business Entity Assumption
Long Term Liabilities
Cash Basis Accounting
8. The principle prescribing that revenue is recognized when earned.
Ethical Dilemma
Posting Reference Column
Revenue Recognition Principle
Revenues
9. 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).
Closing Entries
Generally Accepted Accounting Principles
NASDAQ
Deficit
10. Independent group of full-time members responsible for setting accounting rules.
Measurement Principle
Financial Accounting Standards Board
Posting Reference Column
Debtors
11. Assets acquisition costs less its accumulated depreciation - depletion - or amortization. Also sometimes used synonymously as the carrying value of an account.
Going-concern Assumptions
Book Value
Portfolio Income
International Financial Reporting Standards
12. 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
International Financial Reporting Standards
Portfolio Income
Preferred Stock
Time Period Assumptions
13. Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern Assumptions
Pro Forma Financial Statement
Audit
Cost-benefit Constraint
14. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Partnership Agreement
Bookkeeping
Posting
Depreciation
15. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
Limited Liability Corporation
Owner - Capital
Trial balance
General Journal
16. Happenings that both affect an organization's financial position and can be reliably measured.
Shareholders
T Account
Shares
Events
17. Loaning or giving money to a business in orer to save it from bankruptcy.
Surplus
Book Value
Bailout
Risk Tolerance
18. Obligations due to be paid or settled within one year or the company's operating cycle - whichever is longer.
General Journal
Common Stock
Expanded Accounting Equation
Current Liabilities
19. 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
Posting Reference Column
Accrued Revenues
IPO
20. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Straight-line Depreciation Method
Varaiable Expense
Posting
Generally Accepted Accounting Principles
21. 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
Closing process
Common Stock
Revenue Recognition Principle
22. Assumption that an organization's activities can be divided into specific time periods such as months - quarters - and years.
Events
Time Period Assumptions
Posting Reference Column
Stock
23. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Liabilities
Adjusting Entry
Financial Accounting Standards Board
Ethics
24. Long term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Posting
Long Term Investments
T Account
Common Stock
25. 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
Accrual Basis Accounting
T Account
Owner Investment
26. Gross increase in equity from a company's business activities that earn income.
Ethics
Financial Accounting Standards Board
Shareholders
Revenues
27. Length of time covered by financial statements; also called reporting period.
Accounting Period
Adjusting Entry
Owner - Capital
Unsecured Loan
28. An expense that changes from period to perio - such as food or gasoline costs.
Partnership
Accounting Cycle
Statement of Owner's Equity
Varaiable Expense
29. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Revenue Recognition Principle
Full Disclosure Principle
Accrual Basis Accounting
Time Period Assumptions
30. A financial statement that lists cash inflows and cash outflows during a period; arranged by operating - investing - and financing.
Statement of Cash Flows
Temporary Accounts
Managerial Accounting
Securities
31. A legal entity that is seperate from its owners.
Expenses
Corporations
NYSE (New York Stock Exchange)
Contra Account
32. 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
Return on Assets
Expanded Accounting Equation
Closing process
Money Market Account
33. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Journal
Current Ratio
International Financial Reporting Standards
Varaiable Expense
34. Business owned by one person that is not organized as a corporation.
Trial balance
Cost-benefit Constraint
Sole Proprietorship
Creditors
35. The part of accounting that involves recording transactions and events either manually or electronically. Also called Bookkeeping.
Contra Account
Matching Principle (or Expense Recognition Principle)
Recordkeeping
Common Stock
36. Exchanges of economic value between one entity and another entity.
External Transactions
Ledger
Debt Ratio
Temporary Accounts
37. 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.
Financial Accounting Standards Board
Common Stock
Debt Ratio
Statement of Cash Flows
38. Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
Bailout
Partnership
Unearned Revenue
Accounting Period
39. List of accounts used by a company' includes and identification number for each account.
Sole Propietorship
Prepaid Expenses
Chart of Accounts
Unsecured Loan
40. Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
Financial Accounting Standards Board
Posting Reference Column
Double Entry Accounting
Current Ratio
41. List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
Cash Basis Accounting
Double Entry Accounting
Post Closing Trial Balance
Working Papers
42. A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Posting Reference Column
Intangible assets
Financial Accounting Standards Board
Securities
43. The twelve month period that ends when a company's sales activities are at their lowest point.
Bailout
Managerial Accounting
Bonds
Natural Business Years
44. Persons using accounting information who are directly involved in managing the organization.
Bonds
External Users
Internal users
Full Disclosure Principle
45. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Expanded Accounting Equation
Corporation
Federal Reserve System
Matching Principle (or Expense Recognition Principle)
46. List of accounts and balances prepared before accounting adjustments are recorded and posted.
Trial balance
Unadjusted Trial Balance
Working Papers
Generally Accepted Accounting Principles
47. Sources of information in accounting entries that can be in either paper or electronic form. Also called business papers.
Unearned Revenues
Depreciation
Source Documents
Limited Liability Corporation
48. Report of changes in equity over a period; adjusted for increases and for decreases.
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49. Business owned by a single person.
Return
Materiality Constraint
Business Entity Assumption
Sole Propietorship
50. Statements that show the effect of proposed transactions and events as if they had occurred.
Accounting Equation
IPO
Federal Reserve System
Pro Forma Financial Statement