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






2. Decreases






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






4. A net loss occurs






5. Lists all accounts and their balances






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






7. 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.






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






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






10. The amount allocated to any one accounting period.






11. 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






12. Contains only balance sheet accounts.






13. 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)






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






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






16. Increases






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






18. 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.






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






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

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






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






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






24. Decreases






25. Contributed Capital + Retained Earnings

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






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






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






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






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






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






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






33. People that estimate various things






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






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






36. As an expense and the corresponding liability accumulate.






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






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






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






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






41. 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






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






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






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






45. Accounting Equation






46. International Accounting Standards Board.






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






48. Accounting periods of less than a year.






49. Their related asset accounts on the balance sheet






50. Cash account