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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. A net loss occurs






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






3. People that estimate various things






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






5. Deferral of an expense! (Except land)






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






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






8. Postponement of recognition of an expense already paid.






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






10. 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






11. 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






12. Working totals






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






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






15. As an expense and the corresponding liability accumulate.






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






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






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






19. 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)






20. Lists all accounts and their balances






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






22. 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.






23. International Accounting Standards Board.






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






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






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






27. Revenues - Expenses






28. Accounting periods of less than a year.






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






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






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






32. 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.






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






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






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






36. 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






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






38. Decreases






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






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






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






42. Contributed Capital + Retained Earnings

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43. Contains only balance sheet accounts.






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






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

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






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






48. Their related asset accounts on the balance sheet






49. Accounting Equation






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