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CLEP Financial Accounting

Subjects : clep, 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. Decreases






2. International Accounting Standards Board.






3. Revenue that a company has earned for providing a service but for which it has not billed or been paid by the end of the accounting period.






4. Deals with all techniques accountants use to apply the matching rule: Recording revenue when they are earned - Recording expenses when they are incurred - More closely related to profitability - Adjusting the accounts






5. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.






6. Match expenses with the revenues that they help generate - & vice versa.






7. Their related asset accounts on the balance sheet






8. Lists all accounts and their balances






9. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.






10. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.






11. Postponement of recognition of an expense already paid.






12. Payments received in advance - and deposits made on goods and services






13. It's usual balance and is the side (debit or credit) that increases the amount.






14. Decreases






15. Accounting for revenues in the period in which cash is received and for expenses in the period where cash is paid. More closely related to the goal of liquidity.






16. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.






17. As an expense and the corresponding liability accumulate.






18. Used to accumulate the depreciation on each long-term asset






19. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period






20. Increases






21. The net amount - or 'Book Value' of an asset






22. Payments of rent - insurance - supplies - and the depreciation of plant and equipment






23. The difficulty of deciding when a business transaction should be recorded






24. Determines corporate policy - declares dividends and appoints management.






25. Selling goods and services to customers - employing managers and workers.






26. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.






27. Deferral of an expense! (Except land)






28. If you're having a bad year - to dump everything into something else like pensions

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29. Customer buys a service - company pays an employee for service - company performs service






30. A net loss occurs






31. People that estimate various things






32. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.






33. Cash account






34. Determines that all temporary accounts have zero balances and to double check that total debits = total credits






35. Contains only balance sheet accounts.






36. When an entity sends out a product to a distributor and takes a certain percentage for what they sell it for (Usually occurs when they have excess inventory)






37. Revenues - Expenses






38. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.






39. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.






40. The manipulation of revenues and expenses to achieve a specific outcome.






41. The estimation of business's net income in terms of accounting periods.






42. Accounting Equation






43. Common Stock + Retained Earnings - Dividends + Revenues - Expenses

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44. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely






45. The practice of recording transactions at exchange price at the point of recognition.






46. A separate account that is paired with a related account






47. A temporary account that summarizes all revenues and expenses for the period.






48. The ability to have enough cash to pay debts when they are due.






49. Summarizes revenues earned and expenses incurred by a business over an accounting period. (Shows whether a business achieved its profitability goal)...Revenues - Expenses - Income taxes






50. Net income on the income statement - and profitability comparisons from one accounting period to the next.