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






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






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






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






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






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






7. Their related asset accounts on the balance sheet






8. Sole worker of your business






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






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

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11. Increases






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






13. Accounting periods of less than a year.






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






15. Contains only balance sheet accounts.






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






17. 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






18. The amount allocated to any one accounting period.






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






20. People that estimate various things






21. Accounting Equation






22. Lists all accounts and their balances






23. Cash account






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






25. 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






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






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






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






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






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






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






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






33. Postponement of recognition of an expense already paid.






34. 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






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






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






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






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






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






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






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






42. Deferral of an expense! (Except land)






43. 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.






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






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






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






47. 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)






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

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49. As an expense and the corresponding liability accumulate.






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