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

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2. Revenues - Expenses






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






4. Accounting Equation






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






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






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






8. 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.






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

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10. Decreases






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






12. 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)






13. Decreases






14. Increases






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






16. Working totals






17. Accounting periods of less than a year.






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






19. A net loss occurs






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






21. International Accounting Standards Board.






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






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






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






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






26. 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






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






28. Their related asset accounts on the balance sheet






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






30. Postponement of recognition of an expense already paid.






31. Deferral of an expense! (Except land)






32. Choosing the number of accounting periods






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






34. Lists all accounts and their balances






35. Contains only balance sheet accounts.






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






37. 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






38. People that estimate various things






39. 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






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






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






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






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






44. Sole worker of your business






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






46. Cash account






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






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






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






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