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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. People that estimate various things






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






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






4. Accounting Equation






5. Choosing the number of accounting periods






6. As an expense and the corresponding liability accumulate.






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






8. 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






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






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






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






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






13. Contributed Capital + Retained Earnings

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14. 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.






15. The amount allocated to any one accounting period.






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






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






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






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






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






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






22. Postponement of recognition of an expense already paid.






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






24. Deferral of an expense! (Except land)






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






26. Working totals






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






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






29. Increases






30. Lists all accounts and their balances






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






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






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






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






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






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

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






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






39. Revenues - Expenses






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






41. 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)






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






43. Contains only balance sheet accounts.






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






45. Decreases






46. 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.






47. Accounting periods of less than a year.






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






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

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50. International Accounting Standards Board.