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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. 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.






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






3. 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






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






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






6. As an expense and the corresponding liability accumulate.






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






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






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






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






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






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






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






14. A net loss occurs






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






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






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






18. Revenues - Expenses






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






20. Increases






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






22. Contains only balance sheet accounts.






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

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24. Postponement of recognition of an expense already paid.






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






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






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






28. 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)






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






30. Accounting Equation






31. 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






32. Sole worker of your business






33. Choosing the number of accounting periods






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






35. Accounting periods of less than a year.






36. Working totals






37. People that estimate various things






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






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






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






41. Cash account






42. Their related asset accounts on the balance sheet






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






44. International Accounting Standards Board.






45. The amount allocated to any one accounting period.






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






47. 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






48. Decreases






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






50. Decreases