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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. Shows the changes in RE over an accounting period.






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






3. Contributed Capital + Retained Earnings


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






5. Cash account






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






7. 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)






8. International Accounting Standards Board.






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






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






11. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured






12. 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






13. Generally Accepted Accounting Principles - or guidelines for financial accounting.






14. A 12 month accounting period (Vary depending on slack seasons)






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


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






17. Deferral of an expense! (Except land)






18. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future






19. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account






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






21. The amount allocated to any one accounting period.






22. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely






23. Accounting Equation






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






25. 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






26. Decreases






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


28. Decreases






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






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






31. Increases






32. 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.






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






34. 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.






35. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.






36. Postponement of recognition of an expense already paid.






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






38. Made at the end of accounting period..-They clear revenue - expense accounts - and dividends account of their balances. -Summarize a period's revenue and expenses by transferring the balances of them to the income summary account






39. People that estimate various things






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






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






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






43. Lists all accounts and their balances






44. Accounting periods of less than a year.






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






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






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






48. As an expense and the corresponding liability accumulate.






49. Revenues - Expenses






50. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.