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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. Accounting periods of less than a year.






2. Their related asset accounts on the balance sheet






3. Contributed Capital + Retained Earnings

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






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






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






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






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






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






10. 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.






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






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






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






14. 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.






15. Contains only balance sheet accounts.






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






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






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






19. Increases






20. Working totals






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






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






23. Decreases






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






25. People that estimate various things






26. Sole worker of your business






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






28. 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






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






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






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






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






33. The amount allocated to any one accounting period.






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






35. 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)






36. International Accounting Standards Board.






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

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






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






40. Accounting Equation






41. Lists all accounts and their balances






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






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






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






45. 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






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






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






48. A net loss occurs






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






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