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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. Choosing the number of accounting periods






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






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






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






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






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






7. Accounting Equation






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






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






10. A net loss occurs






11. People that estimate various things






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






13. 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






14. 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.






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






16. Contains only balance sheet accounts.






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






18. Their related asset accounts on the balance sheet






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






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

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21. 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






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






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






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






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






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






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






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






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






30. Cash account






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






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






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






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






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






36. 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






37. Revenues - Expenses






38. 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)






39. Deferral of an expense! (Except land)






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






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






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






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






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






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






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






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






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






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






50. Postponement of recognition of an expense already paid.