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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. The amount allocated to any one accounting period.






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






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






4. Contains only balance sheet accounts.






5. Lists all accounts and their balances






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






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






8. Cash account






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






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






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






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






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






14. 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






15. Decreases






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






17. Postponement of recognition of an expense already paid.






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






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






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






21. Increases






22. 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)






23. 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.






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






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






26. Working totals






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






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






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






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

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






33. Accounting Equation






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






35. A net loss occurs






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






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






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






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

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






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






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






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






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






45. Deferral of an expense! (Except land)






46. Choosing the number of accounting periods






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






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






49. Sole worker of your business






50. As an expense and the corresponding liability accumulate.