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






2. 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






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






4. International Accounting Standards Board.






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






6. As an expense and the corresponding liability accumulate.






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






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






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






10. Sole worker of your business






11. Cash account






12. 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






13. Revenues - Expenses






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






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






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






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






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






19. Their related asset accounts on the balance sheet






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






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






22. Postponement of recognition of an expense already paid.






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






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






25. Choosing the number of accounting periods






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

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27. Accounting periods of less than a year.






28. 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






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






30. Decreases






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






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






33. 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)






34. 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.






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






36. Deferral of an expense! (Except land)






37. Accounting Equation






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






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






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






41. Lists all accounts and their balances






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






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






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






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






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






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






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






49. 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.






50. Contributed Capital + Retained Earnings

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Can you answer 50 questions in 15 minutes?


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