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






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






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






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






5. Cash account






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






7. 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






8. 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






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






10. Postponement of recognition of an expense already paid.






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






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






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






15. 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.






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






17. Their related asset accounts on the balance sheet






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






19. Decreases






20. Deferral of an expense! (Except land)






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






22. Contributed Capital + Retained Earnings


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






24. Sole worker of your business






25. People that estimate various things






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






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






28. A net loss occurs






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






30. Contains only balance sheet accounts.






31. 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






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






33. International Accounting Standards Board.






34. Increases






35. Lists all accounts and their balances






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






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






38. The amount allocated to any one accounting period.






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






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






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






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






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






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






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






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






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






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






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


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