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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. Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Posting
Auditors
Matching Principle (or Expense Recognition Principle)
Income Summary
2. Persons using accounting information who are not directly involved in running the organization.
Expense Recognition Principle
Mergers
Accounting Cycle
External Users
3. Expenses that remain the same regardless of the circumstances.
Time Period Assumptions
Fixed Expense
Risk
External Users
4. Length of time covered by financial statements; also called reporting period.
Owner Withdrawals
Accounting Period
Conceptual Framework
Sole Proprietorship
5. A business structure that offers membership instead of shares - and combines limited liability protections with the tax from of a partneship.
CD (Certificate of Deposit)
Limited Liability Corporation
Passive Income
Debt Ratio
6. An expense that changes from period to perio - such as food or gasoline costs.
Partnership Agreement
Statement of Cash Flows
Account Balance
Varaiable Expense
7. Obligations not due to be paid within one year or the operating cycle - whichever is longer.
Bonds
Ledger
Long Term Liabilities
Stockholders
8. A written framework to guide the development - preparation - and interpretation of financial accounting information.
Owner - Capital
Conceptual Framework
Limited Liability Corporation
Shareholders
9. Ratio used to evaluate a company's ability to pay its short term obligations - calculated by dividing current assets by current liabilities.
Bailout
Current Ratio
Shareholders
External Users
10. Necessary end of period steps to prepare the accounts for recording the transactions of the next period.
Closing process
Income Statement
Mergers
Revenues
11. Recorded on the left side; an entry that increases asset and expense accounts - and decreases liability - revenue and most equity accounts. Abbreviated Dr.
Permanent Accounts
SMART Goal
Debit
Going-concern Assumptions
12. Balance sheet that presents assets and liabilities in relevant subgroups - including current and non-current classifications.
Present Value
Classified Balance Sheet
Stock
Reversing Entries
13. Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Debt Ratio
Account
Corporation
Liabilities
14. Accounting system that recognizes revenues when earned and expenses when incurred; the basis for GAAP.
Accounting Cycle
Unearned Revenue
Internal users
Accrual Basis Accounting
15. 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.
Stockholders
Matching Principle (or Expense Recognition Principle)
Net Income
Expense Recognition Principle
16. Financial statement that lists types and dollar amounts of assets - liabilities - and equity at a specific date.
Income Statement
Money Market Account
Bookkeeping
Balance Sheet
17. 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
Equity
Financial Accounting Standards Board
Mergers
18. Normal time between paying cash for merchandise or employee services and receiving cash from customers.
Generally Accepted Accounting Principles
Net Income
Financial Accounting
Operating Cycle
19. Business owned by one person that is not organized as a corporation.
Sole Proprietorship
Intangible assets
Current Assets
Preferred Stock
20. Business owned by a single person.
Money Market Account
Revenue Recognition Principle
Stock
Sole Propietorship
21. List of accounts and their balances at a point in time; total debit balances must equal total credit balances.
Profit Margin
Federal Reserve System
Cash Basis Accounting
Trial balance
22. The twelve month period that ends when a company's sales activities are at their lowest point.
Account
Natural Business Years
Business Entity Assumption
Passive Income
23. The act one corporation acquiring another through the purchase of its shares - or by purchasing its assets.
Conceptual Framework
Statement of Owner's Equity
International Financial Reporting Standards
Acquisition
24. Happenings that both affect an organization's financial position and can be reliably measured.
Return on Assets
Monetary Unit Assumption
Events
Business Entity Assumption
25. A loan that is not backed by collateral - but by the promise of the borrower to repay it.
Unsecured Loan
Closing Entries
Corporations
Discretionary Income
26. Persons using accounting information who are directly involved in managing the organization.
Annual Financial Statements
Accounting
Federal Reserve System
Internal users
27. Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
Work Sheet
Passive Income
Business Entity Assumption
Financial Accounting
28. Outflows or using up of assets as part of operations of business to generate sales.
Expenses
NYSE (New York Stock Exchange)
Bonds
Monetary Unit Assumption
29. Business owned by two or more people.
Partnership
Closing Entries
Matching Principle (or Expense Recognition Principle)
Going-concern Assumptions
30. 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
NASDAQ
Permanent Accounts
Financial Accounting
Mergers
31. Code of conduct by which actions are judged as right or wrong - fair or unfair - honest or dishonest.
Balance Column Account
Net Income
Bonds
Ethics
32. Record in which trans actions are entered before they are posted to ledger accounts; also called the book of original entry.
Closing Entries
IPO
Journal
Corporations
33. Difference between total debits and total credits (including the beginning balance) for an account.
Discretionary Income
Account Balance
Assets
Corporation
34. Long Term assets (resources) used to produce or sell products or services. Usually lack physical form and have uncertain benefits.
Income Summary
Chart of Accounts
Securities
Intangible assets
35. The value of a future cash steam discounted at the appropriate market interest rate.
Present Value
Income Summary
Sole Propietorship
Owner - Capital
36. Loaning or giving money to a business in orer to save it from bankruptcy.
Current Liabilities
Bailout
Going-concern Assumptions
Common Stock
37. Record containing all accounts (with amounts) for a business.
Ledger
Statement of Owner's Equity
Liabilities
External Transactions
38. Individuals hired to review financial reports and information systems of organizations.
Owner - Capital
Revenue Recognition Principle
Full Disclosure Principle
Auditors
39. 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).
Income Summary
Corporation
Reversing Entries
Temporary Accounts
40. Monies (or sums of money) received from an investment; often in percent form.
Owner Investment
Return
Plant Assets
Corporations
41. Financial instruments such as stocks - bonds - and mutual funds that are traded in a stock exchange.
NYSE (New York Stock Exchange)
Income Statement
Double Entry Accounting
Securities
42. Assets put into the business by the owner.
Contra Account
Owner Investment
Going-concern Assumptions
Long Term Investments
43. Federal agency Congress has charged to set reporting rules for organizations that sell ownership shares to the public.
Securities and Exchange Commission
Unclassified Balance Sheets
Debt Ratio
Return
44. Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
Working Papers
Equity
Sole Propietorship
Straight-line Depreciation Method
45. Prescribes that accounting for items that significantly impact a financial statement and any inferences from them adhere strictly to GAAP.
IRA (Individual Retirement Account)
Fiscal Year
Internal users
Materiality Constraint
46. 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.
Equity
Expense Recognition Principle
Unearned Revenues
NYSE (New York Stock Exchange)
47. Expense created by allocating the cost of plant and equipment to periods in which they are used. Represents the expense of using the asset.
Internal users
Adjusted Trial Balance
Risk Tolerance
Depreciation
48. The notion that only information with benefits of disclosure greater than the costs of disclosure need to be disclosed.
Securities and Exchange Commission
Accrued Expenses
Partnership
Cost-benefit Constraint
49. Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Cost Principle
Bailout
Unsecured Loan
Permanent Accounts
50. Tool used to show the effects of transactions and events on individual accounts.
Journal
Sarbanes-Oxley Act (SOX)
T Account
International Financial Reporting Standards