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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. 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)






2. Choosing the number of accounting periods






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






4. Cash account






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






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






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






8. A net loss occurs






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






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






11. Postponement of recognition of an expense already paid.






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






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






14. Deferral of an expense! (Except land)






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






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






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






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






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

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






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






22. As an expense and the corresponding liability accumulate.






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






24. Accounting periods of less than a year.






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






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






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






28. 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.






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






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






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






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






33. 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






34. Sole worker of your business






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






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






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






38. Their related asset accounts on the balance sheet






39. Increases






40. The amount allocated to any one accounting period.






41. Revenues - Expenses






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






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






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






45. 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






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

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47. Contributed Capital + Retained Earnings

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48. Decreases






49. People that estimate various things






50. 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