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






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






3. Accounting Equation






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






5. A net loss occurs






6. Contains only balance sheet accounts.






7. People that estimate various things






8. 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)






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






10. 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






11. Sole worker of your business






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






13. Postponement of recognition of an expense already paid.






14. Deferral of an expense! (Except land)






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






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






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






18. International Accounting Standards Board.






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






20. Working totals






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






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






23. Their related asset accounts on the balance sheet






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






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






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






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






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






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






30. 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.






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






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






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






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






35. Lists all accounts and their balances






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

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






38. Revenues - Expenses






39. Cash account






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

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






42. Accounting periods of less than a year.






43. 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.






44. Contributed Capital + Retained Earnings

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






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






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






48. 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






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






50. Decreases