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






2. 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.






3. Decreases






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






5. Accounting Equation






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






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






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






9. Working totals






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






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


12. Increases






13. Cash account






14. Their related asset accounts on the balance sheet






15. Contributed Capital + Retained Earnings


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






17. Postponement of recognition of an expense already paid.






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






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






21. Lists all accounts and their balances






22. A net loss occurs






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






24. Contains only balance sheet accounts.






25. Deferral of an expense! (Except land)






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






27. 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)






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






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






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






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






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






33. International Accounting Standards Board.






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






35. Accounting periods of less than a year.






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






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






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






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






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






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






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






43. 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.






44. Decreases






45. 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






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






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






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






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






50. Revenues - Expenses