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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. 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






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






3. Deferral of an expense! (Except land)






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

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5. 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






6. 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






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






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






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






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






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






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






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






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






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






16. Decreases






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






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






19. Increases






20. 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.






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






22. People that estimate various things






23. Lists all accounts and their balances






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






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






26. Revenues - Expenses






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






28. As an expense and the corresponding liability accumulate.






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






30. Contributed Capital + Retained Earnings

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






32. Accounting Equation






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






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






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






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






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






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






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






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

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






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






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






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






45. International Accounting Standards Board.






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






47. Working totals






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






49. Postponement of recognition of an expense already paid.






50. Choosing the number of accounting periods