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






2. Sole worker of your business






3. Decreases






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






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






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






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






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






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

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10. Shows the changes in RE over an accounting period.






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






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






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






14. Deferral of an expense! (Except land)






15. 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






16. Revenues - Expenses






17. Contributed Capital + Retained Earnings

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18. As an expense and the corresponding liability accumulate.






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






20. Lists all accounts and their balances






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






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






23. The predetermined time at which a transaction should be recorded.






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






25. Working totals






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






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






28. 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.






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






30. Increases






31. Decreases






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






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






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






35. The amount allocated to any one accounting period.






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






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






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






39. Choosing the number of accounting periods






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






41. People that estimate various things






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






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






44. 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.






45. 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)






46. Revenues that a company has earned but for which no entry has been made in the accounting records






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






48. Cash account






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






50. Their related asset accounts on the balance sheet