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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. A net loss occurs






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






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






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






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






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






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






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






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






10. 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)






11. Increases






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






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






14. International Accounting Standards Board.






15. Postponement of recognition of an expense already paid.






16. 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.






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






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






19. 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






20. 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






21. The amount allocated to any one accounting period.






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






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






24. As an expense and the corresponding liability accumulate.






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






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






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






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






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






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






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






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

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






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

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






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






37. Deferral of an expense! (Except land)






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






39. Cash account






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






41. 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.






42. Lists all accounts and their balances






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






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






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






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






47. 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






48. Working totals






49. Contributed Capital + Retained Earnings

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