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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. Determines corporate policy - declares dividends and appoints management.






2. 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.






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






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






5. 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.






6. Accounting periods of less than a year.






7. 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)






8. 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






9. 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






10. As an expense and the corresponding liability accumulate.






11. Deferral of an expense! (Except land)






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






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






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






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






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






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






18. International Accounting Standards Board.






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






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






21. Decreases






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






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






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






25. 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






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






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






28. Their related asset accounts on the balance sheet






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






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






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






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






33. Choosing the number of accounting periods






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






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






36. Working totals






37. Cash account






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






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

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

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






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






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






44. Decreases






45. Increases






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






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






48. Sole worker of your business






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






50. Postponement of recognition of an expense already paid.